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OLD MUTUAL PLC - Old Mutual plc Preliminary Results for the year ended 31 December 2013 - Part 2

Release Date: 28/02/2014 09:01
Code(s): OML     PDF:  
Wrap Text
Old Mutual plc Preliminary Results for the year ended 31 December 2013 - Part 2

Old Mutual
ISIN CODE: GB00B77J0862
JSE SHARE CODE: OML
NSX SHARE CODE: OLM
ISSURE CODE: OLOML

Part 4 – Financial information

Index to the financial information
For the year ended 31 December 2013

Consolidated income statement                                      53   
Consolidated statement of comprehensive income                     54   
Reconciliation of adjusted operating profit to profit after tax    55   
Consolidated statement of financial position                       56   
Condensed consolidated statement of cash flows                     57   
Consolidated statement of changes in equity                        58   
Notes to the consolidated financial statements                          
A: Significant accounting policies                                 62   
B: Segment information                                             66   
C: Other key performance information                               76   
D: Other income statement notes                                    82   
E: Financial assets and liabilities                                84   
F: Other statement of financial position notes                     87   
G: Other notes                                                     88   
H: Discontinued operations and disposal groups held for sale       90   
I: Changes in accounting policies                                  91   
Adjusted Group MCEV by line of business                            94   
Adjusted operating group MCEV statement of earnings                95   
Adjusted operating Group MCEV earnings per share                   96   
Group MCEV statement of earnings                                   97   
Notes to the MCEV basis supplementary information                  98   
A: MCEV policies                                                   98   
B: Segment information                                            107   
C: Other supporting information                                   114   
D: Sensitivity tests                                              117   

Statement of directors' responsibilities
in respect of the preliminary announcement of the Annual Report and the financial statements

The directors confirm that to the best of their knowledge:

   - The financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets,
     liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and
   - The Annual Report includes a fair review of the development and performance of the business and the position of Old Mutual plc and the
     undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

Julian Roberts                           Philip Broadley
Group Chief Executive                    Group Finance Director

28 February 2014

Consolidated income statement
For the year ended 31 December 2013
                                                                                                                     GBPm   
                                                                                                               Year ended   
                                                                                                 Year ended   31 December   
                                                                                                31 December          2012   
                                                                                        Notes          2013   Restated(1)   
Revenue                                                                                                                     
Gross earned premiums                                                                      B2         3,701         3,725   
Outward reinsurance                                                                                   (317)         (322)   
Net earned premiums                                                                                   3,384         3,403   
Investment return (non-banking)                                                                       9,986         9,880   
Banking interest and similar income                                                                   3,050         3,431   
Banking trading, investment and similar income                                                          195           214   
Fee and commission income, and income from service activities                                         3,095         3,039   
Other income                                                                                            100           125   
Total revenue                                                                                        19,810        20,092   
Expenses                                                                                                                    
Claims and benefits (including change in insurance contract provisions)                             (5,410)       (5,612)   
Reinsurance recoveries                                                                                  246           221   
Net claims and benefits incurred                                                                    (5,164)       (5,391)   
Change in investment contract liabilities                                                           (5,873)       (5,361)   
Losses on loans and advances                                                                          (368)         (400)   
Finance costs                                                                                          (81)         (214)   
Banking interest payable and similar expenses                                                       (1,616)       (1,887)   
Fee and commission expenses, and other acquisition costs                                              (976)       (1,064)   
Change in third-party interest in consolidated funds                                                  (564)         (651)   
Other operating and administrative expenses                                                         (3,653)       (3,715)   
Total expenses                                                                                     (18,295)      (18,683)   
Share of associated undertakings' and joint ventures' profit after tax                                   21            32   
Loss on disposal of subsidiaries, associated undertakings and strategic investments     C1(c)           (4)          (56)   
Profit before tax                                                                                     1,532         1,385   
Income tax expense                                                                         D1         (552)         (471)   
Profit from continuing operations after tax                                                             980           914   
Discontinued operations                                                                                                     
Profit from discontinued operations after tax                                           H1(a)             3           564   
Profit after tax for the financial year                                                                 983         1,478   
Attributable to                                                                                                             
Equity holders of the parent                                                                            705         1,172   
Non-controlling interests                                                                                                   
Ordinary shares                                                                         F1(a)           259           256   
Preferred securities                                                                    F1(a)            19            50   
Profit after tax for the financial year                                                                 983         1,478   
Earnings per share                                                                                                          
Basic earnings per share based on profit from continuing operations (pence)                            14.9          12.6   
Basic earnings per share based on profit from discontinued operations (pence)                           0.1          12.3   
Basic earnings per ordinary share (pence)                                               C2(a)          15.0          24.9   
Diluted basic earnings per share based on profit from continuing operations (pence)                    13.8          11.6   
Diluted basic earnings per share based on profit from discontinued operations (pence)                   0.1          11.5   
Diluted basic earnings per ordinary share (pence)                                       C2(b)          13.9          23.1   
Weighted average number of ordinary shares (millions)                                   C2(a)         4,442         4,587   

(1) The prior year has been restated for the impact of changes in accounting policies. Refer to note I1 for further details

Consolidated statement of comprehensive income
For the year ended 31 December 2013
                                                                                                                     GBPm   
                                                                                                               Year ended   
                                                                                                 Year ended   31 December   
                                                                                                31 December          2012   
                                                                                        Notes          2013   Restated(1)   
Profit after tax for the financial year                                                                 983         1,478   
Other comprehensive income for the financial year                                                                           
Items that will not be reclassified subsequently to profit or loss                                                          
Fair value gains                                                                                                            
Property revaluation                                                                                     23            20   
Measurement gains on defined benefit plans                                                               70             8   
Income tax on items that will not be reclassified subsequently to profit or loss        D1(c)          (12)             6   
                                                                                                         81            34   
Items that may be reclassified subsequently to profit or loss                                                               
Fair value gains                                                                                                            
Net investment hedge                                                                                     43           160   
Available-for-sale investments                                                                                              
Fair value (losses)/gains                                                                               (5)            30   
Recycled to profit or loss                                                                              (9)          (21)   
Shadow accounting                                                                                         -             6   
Currency translation differences on translating foreign operations                                  (1,257)         (641)   
Other movements                                                                                           9          (22)   
Income tax on items that may be reclassified subsequently to profit or loss             D1(c)             2           (5)   
                                                                                                    (1,217)         (493)   
Total other comprehensive income for the financial year from continuing operations                  (1,136)         (459)   
Total other comprehensive income for the financial year from discontinued operations(2) H1(b)             -         (348)   
Total other comprehensive income for the financial year                                             (1,136)         (807)   
Total comprehensive income for the financial year                                                     (153)           671   
Attributable to                                                                                                             
Equity holders of the parent                                                                           (96)           503   
Non-controlling interests                                                                                                   
Ordinary shares                                                                                        (76)           118   
Preferred securities                                                                                     19            50   
Total comprehensive income for the financial year                                                     (153)           671   

(1) The prior year has been restated for the impact of changes in accounting policies. Refer to note I1 for further details.
(2) Total other comprehensive income from discontinued operations for the year ended 31 December 2012 includes GBP350 million cumulative foreign exchange
    translation gains, previously included in foreign currency translation reserves that was realised on the disposal of Nordic.

Reconciliation of adjusted operating profit to profit after tax
For the year ended 31 December 2013
                                                                               GBPm   
                                                                         Year ended   
                                                           Year ended   31 December   
                                                          31 December          2012   
                                                  Notes          2013   Restated(1)   
Core operations                                                                       
Emerging Markets                                     B3           590           611   
Old Mutual Wealth                                    B3           217           195   
Property & Casualty                                  B3             4            37   
Nedbank                                              B3           797           825   
USAM                                                 B3           111            91   
                                                                1,719         1,759   
Finance costs                                        B3          (92)         (130)   
Long-term investment return on excess assets                       43            54   
Net interest payable to non-core operations                      (11)          (18)   
Corporate costs                                                  (54)          (54)   
Other net income                                                    7             1   
Adjusted operating profit before tax                            1,612         1,612   
Adjusting items                                   C1(a)         (286)         (467)   
Non-core operations                                  B3            32           165   
Profit before tax (net of policyholder tax)                     1,358         1,310   
Income tax attributable to policyholder returns   D1(d)           174            75   
Profit before tax                                               1,532         1,385   
Total tax expense                                 D1(a)         (552)         (471)   
Profit from continuing operations after tax                       980           914   
Profit from discontinued operations after tax     H1(a)             3           564   
Profit after tax for the financial year                           983         1,478   

Adjusted operating profit after tax attributable to ordinary equity holders of the parent

                                                                                                                         GBPm   
                                                                                                                   Year ended   
                                                                                                     Year ended   31 December   
                                                                                                    31 December          2012   
                                                                                            Notes          2013   Restated(1)   
Adjusted operating profit before tax                                                           B3         1,612         1,612   
Tax on adjusted operating profit                                                            D1(d)         (424)         (440)   
Adjusted operating profit after tax                                                                       1,188         1,172   
Non-controlling interests – ordinary shares                                                 F1(a)         (279)         (281)   
Non-controlling interests – preferred securities                                            F1(a)          (19)          (50)   
Adjusted operating profit after tax attributable to ordinary equity holders of the parent      B3           890           841   
Adjusted weighted average number of shares (millions)                                       C2(c)         4,836         4,818   
Adjusted operating earnings per share (pence)                                               C2(c)          18.4          17.5   

(1) The prior year has been restated for the impact of changes in accounting policies. Refer to note I1 for further details.

Basis of preparation of adjusted operating profit
Adjusted operating profit (AOP) reflects the directors' view of the underlying long-term performance of the Group. AOP is a measure of profitability
which adjusts the standard IFRS profit measures for the specific items detailed in note C1 and, as such, it is a non-GAAP measure. This
reconciliation explains the differences between adjusted operating profit and profit after tax as reported under IFRS.

For core life assurance and property & casualty businesses, AOP is based on a long-term investment return, including returns on investments held
by life funds in Group equity and debt instruments, and is stated net of income tax attributable to policyholder returns. For all core businesses, AOP
excludes goodwill impairment, the impact of acquisition accounting intangibles and costs related to successful acquisitions, revaluations of put
options related to long-term incentive schemes, profit/(loss) on acquisition/disposal of subsidiaries, associated undertakings and strategic
investments, fair value profits/(losses) on certain Group debt movements and costs related to the fundamental restructuring of continuing
businesses. AOP includes dividends declared to holders of perpetual preferred callable securities. Old Mutual Bermuda and Nordic are treated as
non-core operations in the AOP disclosure, as such they are not included in AOP. Refer to note B1 for further information on the basis of
segmentation.

Adjusted operating earnings per share is calculated on the same basis as AOP. It is stated after tax attributable to AOP and non-controlling
interests. It excludes income attributable to Black Economic Empowerment trusts of listed subsidiaries. The calculation of the adjusted weighted
average number of shares includes own shares held in policyholders' funds and Black Economic Empowerment trusts.

Consolidated statement of financial position
At 31 December 2013
                                                                                         GBPm   
                                                                                           At   
                                                                             At   31 December   
                                                                    31 December          2012   
                                                            Notes          2013   Restated(1)   
Assets                                                                                          
Goodwill and other intangible assets                                      2,835         3,056   
Mandatory reserve deposits with central banks                               759           921   
Property, plant and equipment                                               722           847   
Investment property                                                       1,811         1,947   
Deferred tax assets                                                         303           345   
Investments in associated undertakings and joint ventures                   168           152   
Deferred acquisition costs                                                1,211         1,288   
Reinsurers' share of policyholder liabilities                             1,875         1,406   
Loans and advances                                                       33,386        38,495   
Investments and securities                                               88,417        88,513   
Current tax receivable                                                      128           103   
Trade, other receivables and other assets                                 2,583         3,006   
Derivative financial instruments                                          1,259         1,780   
Cash and cash equivalents                                                 4,869         5,061   
Non-current assets held for sale                                              5            42   
Total assets                                                            140,331       146,962   
Liabilities                                                                                     
Long-term business policyholder liabilities                              81,141        80,188   
General insurance liabilities                                               332           346   
Third-party interests in consolidated funds                               5,478         6,116   
Borrowed funds                                                 E1         2,629         3,050   
Provisions and accruals                                                     236           265   
Deferred revenue                                                            628           689   
Deferred tax liabilities                                                    491           404   
Current tax payable                                                         237           287   
Trade, other payables and other liabilities                               4,274         4,940   
Amounts owed to bank depositors                                          34,370        39,499   
Derivative financial instruments                                          1,478         1,402   
Non-current liabilities held for sale                                         -             3   
Total liabilities                                                       131,294       137,189   
Net assets                                                                9,037         9,773   
Shareholders' equity                                                                            
Equity attributable to equity holders of the parent                       7,270         7,816   
Non-controlling interests                                                                       
Ordinary shares                                             F1(b)         1,502         1,684   
Preferred securities                                        F1(b)           265           273   
Total non-controlling interests                                           1,767         1,957   
Total equity                                                              9,037         9,773   

(1) The prior year has been restated for the impact of changes in accounting policies. Refer to note I1 for further details.

Consolidated statement of cash flows
For the year ended 31 December 2013
                                                                                                                       GBPm   
                                                                                                                 Year ended   
                                                                                                  Year  ended   31 December   
                                                                                                  31 December          2012   
                                                                                                         2013   Restated(1)   
Cash flows from operating activities                                                                                          
Profit before tax                                                                                       1,532         1,385   
Non-cash movements in profit before tax                                                                 1,423           249   
Changes in working capital                                                                                447         1,039   
Taxation paid                                                                                           (458)         (295)   
Net cash inflow from operating activities                                                               2,944         2,378   
Cash flows from investing activities                                                                                          
Net acquisitions of investments and securities                                                        (1,658)       (1,449)   
Acquisition of investment properties                                                                     (47)          (55)   
Proceeds from disposal of investment properties                                                            22            67   
Acquisition of property, plant and equipment                                                            (113)         (120)   
Proceeds from disposal of property, plant and equipment                                                     6             7   
Acquisition of intangible assets                                                                         (86)          (72)   
Acquisition of interests in subsidiaries, associated undertakings and strategic investments             (119)          (23)   
Disposal of interests in subsidiaries, associated undertakings and strategic investments                    8         1,883   
Net cash (outflow)/inflow from investing activities                                                   (1,987)           238   
Cash flows from financing activities                                                                                          
Dividends paid to                                                                                                             
Ordinary equity holders of the Company                                                                  (336)       (1,172)   
Non-controlling interests and preferred security interests                                              (183)         (211)   
Dividends received from associated undertakings                                                            13             7   
Interest paid (excluding banking interest paid)                                                          (51)          (85)   
Proceeds from issue of ordinary shares (including by subsidiaries to non-controlling interests)            11            35   
Net disposal of treasury shares                                                                            55            19   
Issue of subordinated and other debt                                                                      586           290   
Subordinated and other debt repaid                                                                      (578)       (1,293)   
Net cash outflow from financing activities                                                              (483)       (2,410)   
Net increase in cash and cash equivalents                                                                 474           206   
Net decrease in cash and cash equivalents - discontinued operations                                         -         (129)   
Effects of exchange rate changes on cash and cash equivalents                                           (828)         (380)   
Cash and cash equivalents at beginning of the year                                                      5,982         6,285   
Cash and cash equivalents at end of the year                                                            5,628         5,982   
Consisting of                                                                                                                 
Cash and cash equivalents                                                                               4,869         5,061   
Mandatory reserve deposits with central banks                                                             759           921   
Total                                                                                                   5,628         5,982   

(1) The prior year has been restated for the impact of changes in accounting policies. Refer to note I1 for further details.

Cash flows presented in this statement include all cash flows relating to policyholders' funds.

Except for mandatory reserve deposits with central banks of GBP759 million (2012: GBP921 million) and cash and cash equivalents subject to
consolidation of funds of GBP1,667 million (2012: GBP1,893 million), management do not consider that there are any material amounts of cash and
cash equivalents which are not available for use in the Group's day-to-day operations. Mandatory reserve deposits are, however, included in cash
and cash equivalents for the purposes of the statement of cash flows in line with market practice in South Africa.

Consolidated statement of changes in equity
For the year ended 31 December 2013
                                                                    Millions                                              
                                                                   Number of                                              
                                                                      shares                                 Available-   
                                                                  issued and     Share     Share    Merger     for-sale   
Year ended 31 December 2013                               Notes   fully paid   capital   premium   reserve      reserve   
Shareholders' equity at beginning of the year                          4,892       559       835     1,717           65   
Impact of changes in accounting policies                     I1            -         -         -         -            -   
Restated shareholders' equity at beginning of the                                                                         
year                                                                   4,892       559       835     1,717           65   
Profit after tax for the financial year                                    -         -         -         -            -   
Other comprehensive income                                                                                                
Items that will not be reclassified subsequently to                                                                       
profit or loss                                                                                                            
Fair value gains                                                                                                          
Property revaluation                                                       -         -         -         -            -   
Measurement gains on defined benefit plans                                 -         -         -         -            -   
Income tax on items that will not be reclassified                                                                         
subsequently to profit or loss                            D1(c)            -         -         -         -            -   
                                                                           -         -         -         -            -   
Items that may be reclassified subsequently to profit                                                                     
or loss                                                                                                                   
Fair value gains/(losses)                                                                                                 
Net investment hedge                                                       -         -         -         -            -   
Available-for-sale investments                                                                                            
Fair value losses                                                          -         -         -         -          (6)   
Recycled to profit or loss                                                 -         -         -         -          (9)   
Currency translation differences on translating foreign                                                                   
operations                                                                 -         -         -         -            -   
Other movements                                                            -         -         -         -            -   
Income tax on items that may be reclassified                                                                              
subsequently to profit or loss                            D1(c)            -         -         -         -            2   
Total comprehensive income for the financial year                          -         -         -         -         (13)   
Dividends for the year                                       C3            -         -         -         -            -   
Equity share-based payment transactions                                    -         -         -         -            -   
Other movements in share capital                                           5         1        10         -            -   
Preferred securities purchased                                             -         -         -         -            -   
Change in participation in subsidiaries                                    -         -         -         -            -   
Transactions with shareholders                                             5         1        10         -            -   
Shareholders' equity at end of the year                                4,897       560       845     1,717           52   

                                                                                                                GBPm   
                                           Foreign               Perpetual                           Total             
   Property   Share-based                 currency               preferred   Attributable to          non-             
revaluation      payments      Other   translation   Retained     callable    equity holders   controlling     Total   
    reserve       reserve   reserves       reserve   earnings   securities     of the parent     interests    equity   
        144           268         33         (378)      3,908          682             7,833         1,965     9,798   
          -             -          -             -       (17)            -              (17)           (8)      (25)   
        144           268         33         (378)      3,891          682             7,816         1,957     9,773   
          -             -          -             -        668           37               705           278       983   
         17             -          -             -          -            -                17             6        23   
          -             -          -             -         52            -                52            18        70   
          -             -          -             -       (14)           10               (4)           (8)      (12)   
         17             -          -             -         38           10                65            16        81   
          -             -          -            43          -            -                43             -        43   
          -             -          -             -          -            -               (6)             1       (5)   
          -             -          -             -          -            -               (9)             -       (9)   
          -             -          -         (899)          -            -             (899)         (358)   (1,257)   
          -             -          4             -        (1)            -                 3             6         9   
          -             -          -             -          -            -                 2             -         2   
         17             -          4         (856)        705           47              (96)          (57)     (153)   
          -             -          -             -      (336)         (47)             (383)         (136)     (519)   
          -            48          -             -         13            -                61          (17)        44   
          -             -          -             -         55            -                66             3        69   
          -             -          -             -       (21)        (156)             (177)             -     (177)   
          -             -          -             -       (17)            -              (17)            17         -   
          -            48          -             -      (306)        (203)             (450)         (133)     (583)   
        161           316         37       (1,234)      4,290          526             7,270         1,767     9,037   

Retained earnings were reduced in respect of own shares held in policyholder's funds, ESOP trusts, Black Economic Empowerment trusts and
other undertakings at 31 December 2013 by GBP428 million. (2012: GBP489 million).

Consolidated statement of changes in equity
For the year ended 31 December 2013
                                                                    Millions                                              
                                                                   Number of                                              
                                                                      shares                                 Available-   
                                                                  issued and     Share     Share    Merger     for-sale   
Year ended 31 December 2012 Restated(1)                   Notes   fully paid   capital   premium   reserve      reserve   
Shareholders' equity at beginning of the year                          5,801       580       805     2,532           53   
Impact of changes in accounting policies                     I1            -         -         -         -            -   
Restated shareholders' equity at beginning of the                                                                         
year                                                                   5,801       580       805     2,532           53   
Profit after tax for the financial year                                    -         -         -         -            -   
Other comprehensive income                                                                                                
Items that will not be reclassified subsequently                                                                          
to profit or loss                                                                                                         
Fair value gains                                                                                                          
Property revaluation                                                       -         -         -         -            -   
Measurement gain on defined benefit plans                                  -         -         -         -            -   
Income tax on items that will not be reclassified                                                                         
subsequently to profit or loss                            D1(c)            -         -         -         -            -   
                                                                           -         -         -         -            -   
Items that may be reclassified subsequently                                                                               
to profit or loss                                                                                                         
Fair value gains/(losses)                                                                                                 
Net investment hedge                                                       -         -         -         -            -   
Available-for-sale investments                                                                                            
Fair value gains                                                           -         -         -         -           33   
Recycled to profit or loss                                                 -         -         -         -         (21)   
Exchange differences recycled to profit or loss                            -         -         -         -            -   
Shadow accounting                                                          -         -         -         -            6   
Currency translation differences on translating foreign                                                                   
operations                                                                 -         -         -         -            -   
Other movements                                                            -         -         -         -            -   
Income tax on items that may be reclassified                                                                              
subsequently to profit or loss                            D1(c)            -         -         -         -          (6)   
Total comprehensive income for the financial year                          -         -         -         -           12   
Dividends for the year                                       C3            -         -         -         -            -   
Equity share-based payment transactions                                    -         -         -         -            -   
Other movements in share capital                                          27         3        30         -            -   
Cancellation of treasury shares                                        (239)      (24)         -         -            -   
Share consolidation                                                    (697)         -         -         -            -   
Preferred securities purchased                                             -         -         -         -            -   
Merger reserve realised in the year                                        -         -         -     (815)            -   
Change in participation in subsidiaries                                    -         -         -         -            -   
Transactions with shareholders                                         (909)      (21)        30     (815)            -   
Shareholders' equity at end of the year                                4,892       559       835     1,717           65   

(1) The prior year has been restated for the impact of changes in accounting policies. Refer to note I1 for further details.

                                                                                                                GBPm   
                                           Foreign               Perpetual                           Total             
   Property   Share-based                 currency               preferred   Attributable to          non-             
revaluation      payments      Other   translation   Retained     callable    equity holders   controlling     Total   
    reserve       reserve   reserves       reserve   earnings   securities     of the parent     interests    equity   
        124           230          5           301      3,170          688             8,488         2,370    10,858   
          -             -          -             -       (20)            -              (20)             -      (20)   
        124           230          5           301      3,150          688             8,468         2,370    10,838   
          -             -          -             -      1,140           32             1,172           306     1,478   
         19             -          -             -          -            -                19             1        20   
          -             -          -             -          8            -                 8             -         8   
          -             -          -             -        (4)           10                 6             -         6   
         19             -          -             -          4           10                33             1        34   
          -             -          -           160          -            -               160             -       160   
          -             -          -             -          -            -                33             1        34   
          -             -          -             -          -            -              (21)             -      (21)   
          -             -          -         (350)          -            -             (350)             -     (350)   
          -             -          -             -          -            -                 6             -         6   
          -             -          -         (489)          -            -             (489)         (150)     (639)   
          1             -          4             -       (40)            -              (35)            10      (25)   
          -             -          -             -          -            -               (6)             -       (6)   
         20             -          4         (679)      1,104           42               503           168       671   
          -             -          -             -    (1,172)         (42)           (1,214)         (169)   (1,383)   
          -            38          -             -          -            -                38            13        51   
          -             -          -             -          7            -                40             -        40   
          -             -         24             -          -            -                 -             -         -   
          -             -          -             -          -            -                 -             -         -   
          -             -          -             -       (13)          (6)              (19)         (445)     (464)   
          -             -          -             -        815            -                 -             -         -   
          -             -          -             -          -            -                 -            20        20   
          -            38         24             -      (363)         (48)           (1,155)         (581)   (1,736)   
        144           268         33         (378)      3,891          682             7,816         1,957     9,773   

Notes to the consolidated financial statements
For the year ended 31 December 2013

A: Significant accounting policies
A1: Basis of preparation

The Group financial statements have been prepared and approved by the directors in accordance with International Financial Reporting Standards
as adopted by the EU. The accounting policies adopted by the Group, unless otherwise stated, have been applied consistently with those applied in
the preparation of the Group's 2012 Annual Report and Accounts.

The Group financial statements are prepared on the historical cost basis except that the following assets and liabilities are stated at their fair value:
derivative financial instruments, financial assets and liabilities designated as fair value through the income statement or as available-for-sale,
owner-occupied property and investment property. Non-current assets and disposal groups held for sale are stated at the lower of the previous
carrying amount and the fair value less costs to sell.

The Group financial statements have been prepared on the going concern basis which the directors believe to be appropriate.

The financial statements contained herein do not constitute the Company's statutory accounts for the financial years ended 31 December 2013 and
31 December 2012 within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the financial year ended 31 December
2012 have been reported on by the Company's auditor and delivered to the Registrar of Companies. The statutory accounts for the financial year
ended year ended 31 December 2013 will be delivered in due course. The report of the auditor for the financial year ended 31 December 2012 was
(i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report,
and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

Translation of foreign operations
The assets and liabilities of foreign operations are translated from their respective functional currencies into the Group's presentation currency using
the year end exchange rates, and their income and expenses using the average exchange rates. Other than in respect of cumulative translation
gains and losses up to 1 January 2004, cumulative unrealised gains or losses resulting from translation of functional currencies to the presentation
currency are included as a separate component of shareholders' equity. To the extent that these gains and losses are effectively hedged, the
cumulative effect of such gains and losses arising on the hedging instruments are also included in that component of shareholders' equity. Upon the
disposal of subsidiaries the cumulative amount of exchange differences deferred in shareholders' equity, net of attributable amounts in relation to
net investments, is recognised in the income statement. Cumulative translation gains and losses up to 1 January 2004 were reset to zero.

The principal exchange rates used to translate the operating results, assets and liabilities of key foreign business segments to pounds sterling are:

                                 Year ended                       Year ended
                           31 December 2013                 31 December 2012
                               Statement of                     Statement of
                     Income       financial          Income        financial
                  statement        position       statement         position
             (average rate)  (closing rate)  (average rate)   (closing rate)
Rand                15.0959         17.4284         13.0123          13.7696
US dollars           1.5650          1.6566          1.5850           1.6242
Euro                 1.1782          1.2014          1.2326           1.2307
 
A2: Significant corporate activity and business changes during the period

Acquisitions effective during the year
Life assurance in Nigeria
On 22 February 2012, the Group announced that it had made an offer to acquire a majority stake in Oceanic Life, the life assurance operations of
Ecobank Transitional Incorporated. The Group consolidated the financial results of Oceanic Life with effect from 1 January 2013.

General insurance in Nigeria
In December 2013 the Group completed its acquisition of the majority stake in the general insurance business of Oceanic General, the general
insurance operations of Ecobank Transitional Incorporated. The balance sheet has been included in the Group consolidated statement of financial
position as at 31 December 2013.

Life assurance in Ghana
On 3 June 2013, the Group announced that it would expand its African presence through the acquisition of a majority stake in Provident Life
Assurance Company Limited. The Group consolidated the financial results of Provident Life with effect from 12 September 2013.

Platform and distribution business in Uruguay
On 19 November 2012, the Group announced that it had acquired a majority stake in AIVA Holding Group SA, a business platform and distribution
business based in Uruguay and spanning the Latin American region. The Group consolidated the financial results with effect from 19 November
2012.

Refer to note G2 for further information on the Group's acquisitions during the year.

The Group is currently progressing the following transactions

Lending in Kenya
On 3 July 2013, the Group announced that it is to enter into a strategic partnership with Faulu Kenya DTM LTD through the acquisition of a
controlling stake in the business. The completion of this transaction is subject to the conclusion of the relevant closing conditions.

Lending in Mozambique
On 3 May 2013, the Group announced that Nedbank had entered into an agreement to acquire an initial 36.4% shareholding of Banco Unico, SA,
located in Mozambique and to increase the stake to a majority shareholding over time. The completion of this transaction is subject to certain
conditions precedent being met.

Skandia Poland
On 12 November 2013, the Group announced that terms have been agreed to sell Skandia Poland, part of Old Mutual Wealth. The transaction is
subject to regulatory approvals and is expected to be completed during 2014.

The Group has completed the following intra-Group transfers during 2013
Transfer of Latin American business to Old Mutual South Africa
The Financial Services Board has approved the acquisition of Skandia Europe and Latin America Holdings Limited by Old Mutual South Africa from
Old Mutual plc and the transaction was completed on 12 July 2013. This resulted in a remittance of GBP120 million to Old Mutual plc.

Transfer of Old Mutual Guodian Life Insurance Company Limited (Guodian) to Old Mutual Life Assurance Company (South Africa) Limited
(OMLACSA)

Legal ownership of the Guodian business, the Group's Chinese joint venture, was transferred to OMLACSA during the year in order to align legal
ownership and management structures. Guodian was previously owned by the Skandia Insurance Company Limited (SICL), which was sold as part
of the sale of the Nordic businesses in 2012. The transfer of Guodian from SICL had been subject to regulatory approval. Upon transfer OMLACSA
paid consideration of GBP44 million, which was ultimately remitted to Old Mutual plc. The results of the Guodian business were reported in the
Emerging Markets segmental result in both of the years ended 31 December 2012 and 2013.

Financing activities
Repayment of Group debt
On 19 November 2013, the Group repurchased GBP75 million of its GBP348 million Tier 1 preferred callable securities and EUR121 million of its EUR495
million Upper Tier 2 preferred callable securities via a Modified Dutch Auction tender. At 31 December 2013, GBP273 million Tier 1 and EUR374 million
Upper Tier 2 preferred callable securities remained outstanding. For the year ended 31 December 2013, the Group recognised a loss of GBP21
million directly in equity, as these securities are classified as equity instruments for accounting purposes.

A total $14 million of the outstanding $16 million secured senior debt was repaid in two tranches on 1 November 2013 and 15 December 2013.

New debt issued by Nedbank
During the year, Nedbank issued R3.0 billion new-style, fully loss-absorbent, Basel lll compliant, Tier 2 subordinated-debt capital to replace the R2.1
billion of Basel II tier 2 capital that matured in September 2013 and December 2013.

Repatriation of Old Mutual Bermuda capital
In July 2013, Old Mutual Bermuda received formal written approval from the Bermuda Monitory Authority (BMA) to repatriate $450 million via
cancellation of OM Group (UK) Limited loan notes. In December 2013, the BMA approved an additional repatriation of $100 million via cancellation
of further loan notes.

(a) Loans and advances
Provisions for impairment of loans and advances
The majority of loans and advances are in respect of Nedbank, which assesses its loan portfolios for impairment at each financial reporting date.
Nedbank actively manages its exposure to loans and advances through robust credit approval processes. The credit loss ratio at year ended 31
December 2013 was 1.06% (2012: 1.05%). The impairment for performing loans is calculated on a portfolio basis, based on historical loss
experience, adjusted for national and industry specific economic conditions and other indicators present at the reporting date that correlate with
defaults on the portfolio. These include early arrears and other indicators of potential default, such as changes in macro-economic conditions and
legislation affecting credit recovery. These annual loss ratios are applied to loan balances in the portfolio and scaled to the estimated loss
emergence period.

For portfolios which comprise large numbers of small homogenous assets with similar risk characteristics where credit scoring techniques are
generally used, statistical techniques are used to calculate impairment allowances on the portfolio, based on historical recovery rates and assumed
emergence periods. There are a number of models in use, each tailored to a product, line of business or client category. Judgement and knowledge
are needed in selecting the statistical methods to use when the models are developed or revised.

For wholesale (larger) exposures impairment allowances are calculated on an individual basis and all relevant considerations that have a bearing
on the expected future cash flows are taken into account. The level of impairment allowance is the difference between the value of the discounted
expected future cash flows and its carrying amount. Subjective judgements are made in the calculations of future cash flows and change with time
as new information becomes available or as strategies evolve, resulting in frequent revisions to the impairment provision as individual decisions are
taken.

Further detail is provided in note E3 in the Annual Report and Accounts.

(b) Policyholder liabilities
Emerging Markets discretionary reserves
Technical provisions in South Africa are derived as the aggregate of:

   - Best estimate liabilities, with assumptions allowing for the best estimate of future experience and a market-consistent valuation of financial
     options and guarantees
   - Compulsory margins, prescribed in the South African professional actuarial guidance note (SAP 104) as explicit changes to actuarial
     assumptions that increase the level of technical provisions held, and
   - Discretionary margins, permitted by SAP 104, to allow for the uncertainty inherent in estimates of future experience after considering available
     options of managing that experience over time, or to defer the release of profits consistent with policy design or company practice

Discretionary margins are held as either implicit or explicit margins. Explicit discretionary margins are derived as conscious changes to assumptions
used to project future experience to increase technical provisions. Implicit discretionary margins arise where the method used to calculate overall
technical provisions results in liabilities that are greater than the sum of best estimate liabilities and compulsory margins.

Explicit discretionary margins of GBP489 million (1.9% of total technical provisions) were held at 31 December 2013. This consisted largely of:

   - Margins held for Mass Foundation Cluster protection business, which allow for the uncertainty related to the future progression of the AIDS
     pandemic in South Africa, as well as future lapse experience and future investment returns, and to ensure that profit is released appropriately
     over the term of the policies
   - Margins to allow for the uncertainty inherent in the assumptions used to value financial options and guarantees, implied volatility assumptions
     in particular, which are difficult to hedge due to the short term nature of the equity option market in South Africa
   - Margins on non-profit annuities, due to the inability to fully match assets to liabilities as a result of the limited availability of long-dated bonds,
     and to provide for longevity risk, and
   - A margin set up in 2013 to allow for the uncertainty inherent in future economic assumptions used to calculate, mainly protection product
     liabilities, in the Retail Affluent business. Although interest rate hedging is used to manage interest rate risk on these products, the volatility of
     bond yields in South Africa means that it is difficult to maintain appropriate hedging positions without incurring significant trading costs. The
     discretionary margin therefore caters for the residual uncertainty present after allowing for the hedge programme that is in place.

Emerging Markets Financial Soundness Valuation discount rate
The calculation of the Group's South African life assurance contract liabilities is sensitive to the discount rate used to value the liabilities. The
methodology applied by the Group requires discount rates to be set according to the South African professional guidance note (SAP 104). In line
with these principles, the reference rate is selected as the Bond Exchange of South Africa (BESA) par bond 10-year yield.

The reference rate was relatively volatile over 2013, ranging from 6.2% to 8.5% during the year ended 31 December 2013 (2012: 6.9% to 8.2%). At
31 December 2013 the reference discount rate was 8.1% (31 December 2012: 6.9%). The volatile interest rate environment had a much smaller
impact on the operating profit for the South African life assurance businesses in 2013, given the management actions taken over 2013 to mitigate
these impacts. These included the continuance of the hedging program put in place during the second half of 2012, the establishment of
discretionary margins to allow for the uncertainty in respect of interest rate volatility in Retail Affluent, and changes to the annual premium and cover
increase policy on Mass Foundation Cluster funeral products.

The Group estimates that a 1% reduction in the reference discount rate will result in an increase in policyholder liabilities of GBP6 million (2012:
GBP39 million), allowing for the impact of the hedging program. The 2013 impact is significantly lower than 2012 mainly, due to the management
actions taken to reduce the impact of changing discount rates on operating profit, as well as the depreciation of the rand which reduced the impact
in sterling terms.

Further disclosure of the policyholder sensitivity to interest rates is provided in note E8(g) in the Annual Report and Accounts.

Old Mutual Bermuda guarantees
Since the closure of Old Mutual Bermuda to new business in March 2009, management's key priorities have been to de-risk the business, manage
the risk and solvency position and preserve shareholder value. The run-off of the book and hedging of the guarantees significantly reduces the
Group's risk exposure. The active contracts for which reserves are held are deferred and fixed index annuity investments and variable annuity
products, which include guaranteed minimum accumulation benefits (GMAB) and guaranteed minimum death benefits (GMDB). The key risk to the
Group relates to the 120% of the initial deposit (or, if elected, the highest anniversary account value) on the 10th anniversary which will commence
in 2017. The Group has implemented a hedging strategy to protect against markets rising above the 120% guarantee and then subsequently falling,
which would reset some guarantees above 120%, with account values at a lower level. This reduces the uncertainty and volatility of capital
exposure and cash flows arising from the highest anniversary value guarantees. The remaining 120% of premium guarantee, relating to equity and
foreign exchange downside risks, for the 10-year obligations are being managed by the dynamic hedge programme. There are no significant risks
to the Group associated with GMDB and management continues to operate strong oversight over the business.

During 2013 the business continued to experience high rates of surrender activity which can be attributed to the variable annuity UGO (Universal
Guarantee Option) GMAB policyholders passing through a top-up process on the fifth anniversary following product inception. This process was
completed in 2013. The reduced size of the book has meant that the associated GMAB reserves have reduced from $229 million at 31 December
2012 to $84 million at 31 December 2013.

(c) Tax
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in profit or loss except to the extent that it
relates to items recognised directly in other comprehensive income, in which case it is recognised in other comprehensive income.

The Group is regularly in discussion with the respective tax authorities in each of the jurisdictions where the Group is active. The Group applies its
judgement to determine if a provision for future tax uncertainties should be recognised based on detailed reviews of any potential exposure to tax
authorities and the assessment of the most probable outcome of the tax uncertainty. As these provisions are based on estimates and rely on
judgements made by the Group, the actual amount of future taxes paid by the Group could be different to the amounts provided.

(d) Consolidation set of standards
The Group has applied the following key judgements in the application of the requirements of the consolidation set of standards (IFRS 10
'Consolidated Financial Statements' and IFRS 11 'Joint Arrangements'):

Consolidation of investment funds and securitisation vehicles
The Group acts as a fund manager to a number of investment funds. In determining whether the Group controls such a fund, it will focus on an
assessment of the aggregate economic interests of the Group (comprising any carried interests and expected management fees) and the investor's
rights to remove the fund manager. The Group assesses, on an annual basis, such interests to determine if the fund will be consolidated. See note
G3(b) in the Annual Report and Accounts for disclosures in respect of the investment funds in which the Group has an interest.

The Group has sponsored certain asset backed financing (securitisation) vehicles under its securitisation programme which are run according to
pre-determined criteria that are part of the initial design of the vehicles. The Group is exposed to variability of returns from the vehicles through its
holding of junior debt securities in the vehicles. It has concluded that it controls these vehicles and therefore has consolidated these asset backed
financing vehicles.

Structured entities
The Group is required to make judgements on what constitutes a structured entity. Accounting standards define a structured entity as an entity
designed so that its activities are not governed by way of voting rights. In assessing whether the Group has power over such investees in which it
has an interest, the Group considers factors such as the purpose and design of the investee, its practical ability to direct the relevant activities of the
investee, the nature of its relationship with the investee and the size of its exposure to the variability of returns of the investee. The Group has
evaluated all exposures and has concluded that all investments in investment funds and securitisation vehicles represent investments in structured
entities.

B: Segment information
B1: Basis of segmentation
The Group's segmental results are analysed and reported on a basis consistent with the way that management and the Board of directors assesses
performance and allocates resources. Information is presented to the Board on a consolidated basis in pounds sterling (the presentation currency) and in
the functional currency of each business.

Adjusted operating profit is one of the key measures reported to the Group's management and Board of directors for their consideration in the
allocation of resources to and the review of performance of the segments. The Group utilises additional measures to assess the performance of
each of the segments, depending on the business line, this typically includes net client cash flows, funds under management, gross earned
premiums, underwriting results, net interest income and non-interest revenue and credit losses.

A reconciliation between the segment revenues and expenses and the Group's revenues and expenses is shown in note B3. Consistent with internal
reporting, assets, liabilities, revenues and expenses that are not directly attributable to a particular segment are allocated between segments where
appropriate and where there is a reasonable basis for doing so. The Group accounts for inter-segment revenues and transfers as if the transactions
were with third parties at current market prices. Given the nature of the operations, there are no major trading activities between the segments.

The revenues generated in each reported segment can be seen in the analysis of profits and losses in note B3. The segmental information in notes
B3 and B4, reflects the adjusted and IFRS measures of profit and loss and the assets and liabilities for each operating segment as provided to
management and the Board of directors. There are no differences between the measurement of the assets and liabilities reflected in the primary
statements and that reported for the segments.

There are four primary business activities from which the Group generates revenues. These are life assurance (premium income), asset
management business (fee and commission income), banking (banking interest receivable) and general insurance (premium income). The principal
lines of business from which each operating segment derives its revenues are as follows:

Core operations
Emerging Markets – life assurance and asset management
Old Mutual Wealth – life assurance and asset management
Property & Casualty – general insurance
Nedbank – banking and asset management
US Asset Management – asset management

Non-core operations
Old Mutual Bermuda – life assurance

Segment presentation
In the 2012 Annual Report and Accounts, the Group announced that, with effect from 1 January 2013, all of the Group's Property & Casualty
activities would be reported as a single segment. Consequently, the Mutual & Federal (M&F) segment has been renamed as Property & Casualty.
This segment includes M&F, 100% of iWyze, previously reported as a 50% joint venture between Emerging Markets and M&F, and the general
insurance businesses in Namibia and Botswana. The name change has been applied to all reporting periods. Comparative information for the year
ended 31 December 2012 has been restated accordingly.

In addition to the above, the Long-Term Savings aggregation has been removed from the adjusted operating profit statement, segmental
information and in the statement of financial position in notes B3 and B4 of the annual financial statements. The Long-Term Savings segment was a
sub total of the Emerging Markets and Old Mutual Wealth segments which the Group previously elected to disclose. This presentational change has
been applied to all reporting periods.

The Group's reported segments are now Emerging Markets, Old Mutual Wealth, Property & Casualty, Nedbank and US Asset Management
(USAM). The Other segment includes Group head office. Old Mutual Bermuda is the principal component of the non-core operations. For all
reporting periods, Old Mutual Bermuda is classified as a continuing operation in the IFRS income statement, but as non-core in determining the
Group's adjusted operating profit.

The Group continues to incur costs related to the sale of its Nordic business in 2012. These costs largely relate to the transition of IT information
and support services that were previously provided by the Nordic business to the wider Group, back to the Group. These costs are included in the
expenses related to the discontinued operations in the annual financial statements for the year ended 31 December 2013. Further information on
the results of discontinued operations is provided in note H1. The Nordic business has been classified as a discontinued operation in the IFRS
consolidated income statement and its results as non-core in determining the Group's adjusted operating profit.

All other businesses have been classified as continuing operations for all reporting periods.

B2: Gross earned premiums and deposits to investment contracts                                                
                                                                                                       GBPm   
                                                                 Emerging   Old Mutual   Property &           
Year ended 31 December 2013                                       Markets       Wealth     Casualty   Total   
Life assurance – insurance contracts                                1,616          336            -   1,952   
Life assurance – investment contracts with discretionary                                                      
participation features                                              1,025            -            -   1,025   
General insurance                                                       -            -          724     724   
Gross earned premiums                                               2,641          336          724   3,701   
Life assurance – other investment contracts recognised                                                        
as deposits                                                         2,015        5,889            -   7,904  
 
                                                                                                       GBPm   
                                                                 Emerging   Old Mutual   Property &           
Year ended 31 December 2012                                       Markets       Wealth     Casualty   Total   
Life assurance – insurance contracts                                1,673          362            -   2,035   
Life assurance – investment contracts with discretionary                                                      
participation features                                                970            -            -     970   
General insurance                                                       -            -          720     720   
Gross earned premiums                                               2,643          362          720   3,725   
Life assurance – other investment contracts recognised                                                        
as deposits                                                         2,022        5,699            -   7,721   

B3: Adjusted operating profit statement - segment information for the year ended 31 December 2013

                                                                                  Emerging   Old Mutual   Property &   
                                                                                   Markets       Wealth     Casualty   
Revenue                                                                                                                
Gross earned premiums                                                        B2      2,641          336          724   
Outward reinsurance                                                                   (80)         (87)        (150)   
Net earned premiums                                                                  2,561          249          574   
Investment return (non-banking)                                                      5,153        4,159           31   
Banking interest and similar income                                                      -            -            -   
Banking trading, investment and similar income                                           -            -            -   
Fee and commission income, and income from service activities                          527        1,173           25   
Other income                                                                            39           21            -   
Inter-segment revenues                                                                  61            1           14   
Total revenue                                                                        8,341        5,603          644   
Expenses                                                                                                               
Claims and benefits (including change in insurance contract provisions)            (4,505)        (347)        (556)   
Reinsurance recoveries                                                                  79           45          122   
Net claims and benefits incurred                                                   (4,426)        (302)        (434)   
Change in investment contract liabilities                                          (1,952)      (3,921)            -   
Losses on loans and advances                                                             -            -            -   
Finance costs (including interest and similar expenses)                                  -            -            -   
Banking interest payable and similar expenses                                            -            -            -   
Fee and commission expenses, and other acquisition costs                             (228)        (622)        (113)   
Change in third-party interest in consolidated funds                                     -            -            -   
Other operating and administrative expenses                                        (1,088)        (408)         (77)   
Income tax attributable to policyholder returns                                       (62)        (112)            -   
Inter-segment expenses                                                                 (6)         (21)         (19)   
Total expenses                                                                     (7,762)      (5,386)        (643)   
Share of associated undertakings' and joint ventures' profit after tax                  11            -            3   
Loss on disposal of subsidiaries, associated undertakings                                                              
and strategic investments                                                 C1(c)          -            -            -   
Adjusted operating profit/(loss) before tax and non-controlling                                                        
interests                                                                              590          217            4   
Income tax expense                                                           D1      (155)         (40)            -   
Non-controlling interests                                                             (11)            -          (5)   
Adjusted operating profit/(loss) after tax and non-controlling                                                         
interests                                                                              424          177          (1)   
Adjusting items net of tax and non-controlling interests                  C1(a)       (74)        (139)         (10)   
Profit/(loss) after tax from continuing operations                                     350           38         (11)   
Profit from discontinued operations after tax                             H1(a)          -            -            -   
Profit/(loss) after tax attributable to equity holders of the parent                   350           38         (11)   

(1) Non-core operations relate to Old Mutual Bermuda. Old Mutual Bermuda profit after tax for the year ended 31 December 2013 was GBP32 million. Non-core
    operations also include a net gain of GBP3 million divestment cost and additional proceeds received in relation to the Nordic business sold in 2012. Further information
    on discontinued operations is provided in note H1.

Of the total revenues, excluding intercompany revenues, GBP4,947 million was generated in the UK (2012: GBP4,318), GBP864 million in the rest
of Europe (2012: GBP1,196 million), GBP13,446 million in Southern Africa (2012: GBP13,966 million), GBP439 million in United States (2012:
GBP529 million) and GBP114 million relates to other operating segments (2012: GBP83 million).

                                                                                             GBPm   
                                                             Adjusting   Discontinued        IFRS   
                          Consolidation           Adjusted       items   and non-core      Income   
Nedbank    USAM   Other     adjustments   operating profit   (note C1)  operations(1)   statement   
      -       -       -               -              3,701           -              -       3,701   
      -       -       -               -              (317)           -              -       (317)   
      -       -       -               -              3,384           -              -       3,384   
      -       -      68             634             10,045        (94)             35       9,986   
  3,050       -       -               -              3,050           -              -       3,050   
    195       -       -               -                195           -              -         195   
  1,048     381       -               8              3,162        (67)              -       3,095   
     31       3     (2)               2                 94           -              6         100   
     11       -       8           (106)               (11)           -             11           -   
  4,335     384      74             538             19,919       (161)             52      19,810   
      -       -       -               -            (5,408)           -            (2)     (5,410)   
      -       -       -               -                246           -              -         246   
      -       -       -               -            (5,162)           -            (2)     (5,164)   
      -       -       -               -            (5,873)           -              -     (5,873)   
  (368)       -       -               -              (368)           -              -       (368)   
      -       -    (92)               -               (92)          11              -        (81)   
(1,616)       -       -               -            (1,616)           -              -     (1,616)   
   (12)     (4)       -            (70)            (1,049)          78            (5)       (976)   
      -       -       -           (564)              (564)           -              -       (564)   
(1,495)   (274)    (78)            (10)            (3,430)       (210)           (13)     (3,653)   
      -       -       -               -              (174)         174              -           -   
   (49)       -    (11)             106                  -           -              -           -   
(3,540)   (278)   (181)           (538)           (18,328)          53           (20)    (18,295)   
      2       5       -               -                 21           -              -          21   
      -       -       -               -                  -         (4)              -         (4)   
    797     111   (107)               -              1,612       (112)             32       1,532   
  (200)    (27)     (2)               -              (424)       (128)              -       (552)   
  (282)       -       -               -              (298)          20              -       (278)   
    315      84   (109)               -                890       (220)             32         702   
     12    (30)      21               -              (220)         220              -           -   
    327      54    (88)               -                670           -             32         702   
      -       -       -               -                  -           -              3           3   
    327      54    (88)               -                670           -             35         705   

B3: Adjusted operating profit statement - segment information for the year ended 31 December 2012 Restated(1)

                                                                                    Emerging   Old Mutual   Property &   
                                                                                     Markets       Wealth     Casualty   
Revenue                                                                                                                  
Gross earned premiums                                                          B2      2,643          362          720   
Outward reinsurance                                                                     (82)         (87)        (153)   
Net earned premiums                                                                    2,561          275          567   
Investment return (non-banking)                                                        5,288        3,806           44   
Banking interest and similar income                                                        -            -            -   
Banking trading, investment and similar income                                             -            -            -   
Fee and commission income, and income from service activities                            440        1,199           26   
Other income                                                                              61           26            1   
Inter-segment revenues                                                                    83            3           18   
Total revenue                                                                          8,433        5,309          656   
Expenses                                                                                                                 
Claims and benefits (including change in insurance contract provisions)              (4,813)        (387)        (485)   
Reinsurance recoveries                                                                    89           59           73   
Net claims and benefits incurred                                                     (4,724)        (328)        (412)   
Change in investment contract liabilities                                            (1,756)      (3,605)            -   
Losses on loans and advances                                                               -            -            -   
Finance costs (including interest and similar expenses)                                    -            -            -   
Banking interest payable and similar expenses                                              -            -            -   
Fee and commission expenses, and other acquisition costs                               (227)        (677)        (113)   
Change in third-party interest in consolidated funds                                       -            -            -   
Other operating and administrative expenses                                          (1,066)        (446)         (82)   
Income tax attributable to policyholder returns                                         (49)         (26)            -   
Inter-segment expenses                                                                  (20)         (32)         (14)   
Total expenses                                                                       (7,842)      (5,114)        (621)   
Share of associated undertakings' and joint ventures' profit after tax                    20            -            2   
Loss on disposal of subsidiaries, associated undertakings                                                                
and strategic investments                                                   C1(c)          -            -            -   
Adjusted operating profit/(loss) before tax and non-controlling interests                611          195           37   
Income tax expense                                                             D1      (164)         (43)          (9)   
Non-controlling interests                                                                (9)            -          (8)   
Adjusted operating profit/(loss) after tax and non-controlling interests                 438          152           20   
Adjusting items net of tax and non-controlling interests                    C1(a)      (153)        (134)         (15)   
Profit/(loss) after tax from continuing operations                                       285           18            5   
Profit from discontinued operations after tax                               H1(a)          -            -            -   
Profit/(loss) after tax attributable to equity holders of the parent                     285           18            5   

(1) The prior year has been restated for the impact of changes in accounting policies. Refer to note I1 for further details.
(2) Non-core operations relate to Old Mutual Bermuda. Old Mutual Bermuda profit after tax for the year ended 31 December 2012 was GBP161 million. It also includes
    GBP4 million of inter-segment revenue and the after tax results of the Group's discontinued operations. Further information on discontinued operations is provided in
    note H1.
                                                                                      GBPm   
                                           Adjusted   Adjusting   Discontinued        IFRS   
                          Consolidation   operating       items   and non-core      Income   
Nedbank    USAM   Other     adjustments      profit   (note C1)  operations(2)   statement   
      -       -       -               -       3,725           -              -       3,725   
      -       -       -               -       (322)           -              -       (322)   
      -       -       -               -       3,403           -              -       3,403   
      -       1      75             722       9,936       (191)            135       9,880   
  3,431       -       -               -       3,431           -              -       3,431   
    214       -       -               -         214           -              -         214   
  1,084     360       -               6       3,115        (76)              -       3,039   
     23       1       -             (1)         111           -             14         125   
     21       -       7           (156)        (24)           -             24           -   
  4,773     362      82             571      20,186       (267)            173      20,092   
      -       -       -               -     (5,685)           -             73     (5,612)   
      -       -       -               -         221           -              -         221   
      -       -       -               -     (5,464)           -             73     (5,391)   
      -       -       -               -     (5,361)           -              -     (5,361)   
  (400)       -       -               -       (400)           -              -       (400)   
      -       -   (130)               -       (130)        (84)              -       (214)   
(1,886)       -       -               -     (1,886)         (1)              -     (1,887)   
      -     (5)       -            (67)     (1,089)          88           (63)     (1,064)   
      -       -       -           (651)       (651)           -              -       (651)   
(1,604)   (276)    (67)             (9)     (3,550)       (147)           (18)     (3,715)   
      -       -       -               -        (75)          75              -           -   
   (58)       -    (32)             156           -           -              -           -   
(3,948)   (281)   (229)           (571)    (18,606)        (69)            (8)    (18,683)   
      -      10       -               -          32           -              -          32   
      -       -       -               -           -        (56)              -        (56)   
    825      91   (147)               -       1,612       (392)            165       1,385   
  (221)    (15)      12               -       (440)        (31)              -       (471)   
  (287)       -    (27)               -       (331)          25              -       (306)   
    317      76   (162)               -         841       (398)            165         608   
     16    (10)   (102)               -       (398)         398              -           -   
    333      66   (264)               -         443           -            165         608   
      -       -       -               -           -           -            564         564   
    333      66   (264)               -         443           -            729       1,172   

B4: Statement of financial position – segment information at 31 December 2013

                                                                    Emerging   Old Mutual   Property &   
                                                            Notes    Markets       Wealth     Casualty   
Assets                                                                                                   
Goodwill and other intangible assets                                     123        1,461           11   
Mandatory reserve deposits with central banks                              -            -            -   
Property, plant and equipment                                            281           12           22   
Investment property                                                    1,443            -            -   
Deferred tax assets                                                       88           20           16   
Investments in associated undertakings and joint ventures                 73            -            3   
Deferred acquisition costs                                                91        1,094           16   
Reinsurers' share of policyholder liabilities                             61        1,690          113   
Loans and advances                                                        58          183            -   
Investments and securities                                            28,492       49,868          297   
Current tax receivable                                                     9           84            3   
Trade, other receivables and other assets                                617          426           96   
Derivative financial instruments                                         349            -            -   
Cash and cash equivalents                                                611          687           91   
Non-current assets held for sale                                           -            5            -   
Inter-segment assets                                                     610           93           25   
Total assets                                                          32,906       55,623          693   
Liabilities                                                                                              
Life assurance policyholder liabilities                               28,043       51,327            -   
General insurance liabilities                                              -            -          332   
Third-party interests in consolidated funds                                -            -            -   
Borrowed funds                                                 E1        172            -            -   
Provisions                                                               125           32            8   
Deferred revenue                                                           7          610           11   
Deferred tax liabilities                                                 169          254           13   
Current tax payable                                                      125           52            -   
Trade, other payables and other liabilities                            1,821          786          126   
Amounts owed to bank depositors                                          280            7            -   
Derivative financial instruments                                         466            -            -   
Non-current liabilities held for sale                                      -            -            -   
Inter-segment liabilities                                                197          312            -   
Total liabilities                                                     31,405       53,380          490   
Net assets                                                             1,501        2,243          203   
Equity                                                                                                   
Equity attributable to equity holders of the parent                    1,471        2,243          183   
Non-controlling interests                                                 30            -           20   
Ordinary shares                                             F1(b)         30            -           20   
Preferred securities                                        F1(b)          -            -            -   
Total equity                                                           1,501        2,243          203   

The net assets of Emerging Markets are stated after eliminating investments in Group equity and debt instruments of GBP302 million (2012:
GBP364 million) held in policyholder funds. These include investments in the Company's ordinary shares and subordinated liabilities and preferred
securities issued by the Group's banking subsidiary Nedbank Limited. All Emerging Markets debt relates to life assurance. All other debt relates to
other shareholders' net assets.
                                                          GBPm   
                          Consolidation     Non-core             
Nedbank    USAM   Other     adjustments   operations     Total   
    446     794       -               -            -     2,835   
    759       -       -               -            -       759   
    391      15       1               -            -       722   
     11       -       -             357            -     1,811   
     11     167       -               -            1       303   
     63      19      10               -            -       168   
      -      10       -               -            -     1,211   
     11       -       -               -            -     1,875   
 33,145       -       -               -            -    33,386   
  5,387      33     378           3,502          460    88,417   
     32       -       -               -            -       128   
    585     113      43             351          352     2,583   
    791       -      62              49            8     1,259   
  1,196     117     457           1,667           43     4,869   
      -       -       -               -            -         5   
     77      21     976         (2,083)          281         -   
 42,905   1,289   1,927           3,843        1,145   140,331   
    852       -       -               -          919    81,141   
      -       -       -               -            -       332   
      -       -       -           5,478            -     5,478   
  1,813       2     642               -            -     2,629   
     40       2      29               -            -       236   
      -       -       -               -            -       628   
     34       -      21               -            -       491   
     17       3      40               -            -       237   
    832     248      40             412            9     4,274   
 34,083       -       -               -            -    34,370   
    974       -       -              36            2     1,478   
      -       -       -               -            -         -   
    567     487     520         (2,083)            -         -   
 39,212     742   1,292           3,843          930   131,294   
  3,693     547     635               -          215     9,037   
  1,976     547     635               -          215     7,270   
  1,717       -       -               -            -     1,767   
  1,452       -       -               -            -     1,502   
    265       -       -               -            -       265   
  3,693     547     635               -          215     9,037   

B4: Statement of financial position – segment information at 31 December 2012 Restated(1)

                                                                    Emerging   Old Mutual   Property &   
                                                            Notes    Markets       Wealth     Casualty   
Assets                                                                                                   
Goodwill and other intangible assets                                      98        1,594           14   
Mandatory reserve deposits with central banks                              -            -            -   
Property, plant and equipment                                            336           13           20   
Investment property                                                    1,588            -            -   
Deferred tax assets                                                       82           44           20   
Investments in associated undertakings and joint ventures                 57            -            2   
Deferred acquisition costs                                               103        1,159           18   
Reinsurers' share of policyholder liabilities                             55        1,236          100   
Loans and advances                                                       142          180            -   
Investments and securities                                            31,157       45,402          397   
Current tax receivable                                                    16           64            5   
Trade, other receivables and other assets                                714          333           92   
Derivative financial instruments                                         612            -            -   
Cash and cash equivalents                                                816          576          109   
Non-current assets held for sale                                           -            5            -   
Inter-segment assets                                                     562          101           43   
Total assets                                                          36,338       50,707          820   
Liabilities                                                                                              
Life assurance policyholder liabilities                               31,124       46,455            -   
General insurance liabilities                                              -            -          346   
Third-party interests in consolidated funds                                -            -            -   
Borrowed funds                                                 E1        218            -            -   
Provisions                                                               120           54           11   
Deferred revenue                                                          11          667           10   
Deferred tax liabilities                                                 130          189           21   
Current tax payable                                                      198           39            -   
Trade, other payables and other liabilities                            2,238          669          146   
Amounts owed to bank depositors                                           86            -            -   
Derivative financial instruments                                         377            -            -   
Non-current liabilities held for sale                                      -            -            -   
Inter-segment liabilities                                                216          587            2   
Total liabilities                                                     34,718       48,660          536   
Net assets                                                             1,620        2,047          284   
Equity                                                                                                   
Equity attributable to equity holders of the parent                    1,606        2,047          261   
Non-controlling interests                                                 14            -           23   
Ordinary shares                                             F1(b)         14            -           23   
Preferred securities                                        F1(b)          -            -            -   
Total equity                                                           1,620        2,047          284   

(1) The prior year has been restated for the impact of changes in accounting policies. Refer to note I1 for further details.

                                                          GBPm   
                          Consolidation     Non-core             
Nedbank    USAM   Other     adjustments   operations     Total   
    534     816       -               -            -     3,056   
    921       -       -               -            -       921   
    465      12       1               -            -       847   
     15       -       -             344            -     1,947   
     34     162       2               -            1       345   
     49      18      26               -            -       152   
      -       8       -               -            -     1,288   
     15       -       -               -            -     1,406   
 38,173       -       -               -            -    38,495   
  6,303      37     368           3,897          952    88,513   
     18       -       -               -            -       103   
    733     105      62             372          595     3,006   
  1,003       -      97              50           18     1,780   
  1,049     115     379           1,892          125     5,061   
     37       -       -               -            -        42   
    111      21   1,366         (2,877)          673         -   
 49,460   1,294   2,301           3,678        2,364   146,962   
    907       -       -               -        1,702    80,188   
      -       -       -               -            -       346   
      -       -       -           6,116            -     6,116   
  2,163      10     659               -            -     3,050   
     49       1      30               -            -       265   
      1       -       -               -            -       689   
     40       -      24               -            -       404   
      9       6      34               -            1       287   
  1,122     193      80             400           92     4,940   
 39,413       -       -               -            -    39,499   
    977       -       8              39            1     1,402   
      3       -       -               -            -         3   
    596     554     922         (2,877)            -         -   
 45,280     764   1,757           3,678        1,796   137,189   
  4,180     530     544               -          568     9,773   
  2,283     507     544               -          568     7,816   
  1,897      23       -               -            -     1,957   
  1,624      23       -               -            -     1,684   
    273       -       -               -            -       273   
  4,180     530     544               -          568     9,773   

C: Other key performance information
C1: Operating profit adjusting items

(a) Summary of adjusting items for determination of AOP
In determining the AOP of the Group for core operations, certain adjustments are made to profit before tax to reflect the directors' view of the
underlying long-term performance of the Group. The following table shows an analysis of those adjustments from AOP to profit before and after tax.

                                                                                                                     GBPm   
                                                                                                 Year ended    Year ended   
                                                                                                31 December   31 December   
                                                                                        Notes          2013          2012   
Income/(expense)                                                                                                            
Goodwill impairment and impact of acquisition accounting                                C1(b)         (141)         (123)   
Loss on disposal of subsidiaries, associated undertakings and strategic investments     C1(c)           (4)          (56)   
Short-term fluctuations in investment return                                            C1(d)             6          (78)   
Investment return adjustment for Group equity and debt instruments held in life funds   C1(e)         (100)         (113)   
Dividends declared to holders of perpetual preferred callable securities                C1(f)            42            42   
US Asset Management equity plans                                                        C1(g)          (38)          (13)   
Credit-related fair value losses on Group debt instruments                              C1(h)          (31)         (126)   
Restructuring costs                                                                     C1(i)          (20)             -   
Total adjusting items                                                                                 (286)         (467)   
Tax on adjusting items                                                                  D1(d)            46            44   
Non-controlling interest in adjusting items                                                              20            25   
Total adjusting items after tax and non-controlling interests                                         (220)         (398)   

(b) Goodwill impairment and impact of acquisition accounting
When applying acquisition accounting, deferred acquisition costs and deferred revenues existing at the point of acquisition are not recognised under
IFRS. These are reversed in the acquisition statement of financial position and replaced by goodwill, other intangible assets and the value of the
acquired present value of in-force business (acquired PVIF). In determining AOP, the Group recognises deferred revenue and acquisition costs and
deferred revenue in relation to policies sold by acquired businesses pre-acquisition. The Group excludes the impairment of goodwill and the
amortisation and impairment of acquired other intangibles and acquired PVIF and the movements in certain acquisition date provisions. Costs
incurred on successful acquisitions are also excluded from AOP. If the intangible assets recognised as a result of a business combination are
subsequently impaired, this is excluded from AOP. The effect of these adjustments to determine AOP are summarised below:

                                                                                      GBPm   
                                                      Emerging   Old Mutual                  
Year ended 31 December 2013                            Markets       Wealth   USAM   Total   
Amortisation of acquired PVIF                                -         (76)      -    (76)   
Amortisation of acquired deferred costs and revenue          -           11      -      11   
Amortisation of other acquired intangible assets           (2)         (46)      -    (48)   
Impairment of goodwill and other intangible assets         (8)         (20)      -    (28)   
                                                          (10)        (131)      -   (141)   

                                                                                      GBPm   
                                                      Emerging   Old Mutual                  
Year ended 31 December 2012                            Markets       Wealth   USAM   Total   
Amortisation of acquired PVIF                                -         (84)      -    (84)   
Amortisation of acquired deferred costs and revenue          -           12      -      12   
Amortisation of other acquired intangible assets           (2)         (48)    (1)    (51)   
Impairment of goodwill and other intangible assets           -            -      -       -   
                                                           (2)        (120)    (1)   (123)   

(c) Loss on disposal of subsidiaries, associated undertakings and strategic investments
Loss on disposal of subsidiaries, associated undertakings and strategic investments is analysed below:

                                                                                                         GBPm   
                                                                                      Year ended   Year ended   
                                                                                              31           31   
                                                                                        December     December   
                                                                                            2013         2012   
USAM                                                                                         (4)         (16)   
Emerging Markets                                                                               -         (15)   
Old Mutual Wealth                                                                              -         (25)   
Loss on disposal of subsidiaries, associated undertakings and strategic investments          (4)         (56)   

USAM
On 2 January 2013, USAM completed the sale of five of its affiliates incurring a loss of GBP1 million.

On 11 October 2013, USAM committed to a plan to cease the operations of Echo Point. The incremental cost of GBP3 million associated with
discontinuing the entity was recognised in full during October 2013.

On 13 April 2012, USAM disposed of Old Mutual Capital, Inc, a subsidiary, at a profit of GBP12 million. On 15 May 2012, USAM disposed of Dwight
Asset Management Company LLC, a fixed income affiliate, at a profit of GBP7 million. On 11 October 2012, the Group announced that it had
finalised agreements to sell five USAM affiliates at a loss of GBP32 million. A GBP3 million loss was also recognised during the year ended 31
December 2012 in relation to disposals of other USAM subsidiaries in previous periods.

Emerging Markets
On 20 November 2012, the Emerging Markets segment recognised a profit of GBP3 million on the acquisition of a strategic investment Curo Fund
Services (Pty) Ltd. Also during the year ended 31 December 2012, the Group incurred expenses of GBP18 million as initial costs regarding
Zimbabwean Indigenisation and Black Economic Empowerment Schemes. These costs were directly related to the acquisition of the Zimbabwean
business.

Old Mutual Wealth
On 31 August 2012, Old Mutual Wealth completed the sale of its Finnish branch at a loss of GBP27 million. A profit of GBP2 million was recognised
on the sale of Skandia Services AG (Switzerland) on 30 June 2012.

(d) Short-term fluctuations in investment return
Profit before tax, as disclosed in the consolidated IFRS income statement, includes actual investment returns earned on the shareholder assets of
the Group's life assurance and general insurance businesses. AOP is stated after recalculating shareholder asset investment returns based on a
long-term investment return rate. The difference between the actual and the long-term investment returns is referred to as the short-term fluctuation
in investment return.

Long-term rates of return are based on achieved rates of return appropriate to the underlying asset base, adjusted for current inflation expectations,
default assumptions, costs of investment management and consensus economic investment forecasts. The underlying rates are principally derived
with reference to 10-year government bond rates, cash and money market rates and an explicit equity risk premium for South African businesses.
The rates set out below reflect the apportionment of underlying investments in cash deposits, money market instruments and equity assets. Long-
term rates of return are reviewed frequently by the Board, usually annually, for appropriateness. The review of the long-term rates of return seeks to
ensure that the returns credited to adjusted operating profit are consistent with the actual returns expected to be earned over the long-term.

For Emerging Markets, the return is applied to an average value of investible shareholders' assets, adjusted for net fund flows. For Old Mutual
Wealth, the return is applied to average investible assets. For Property & Casualty, the return is an average value of investible assets supporting
shareholders' funds and insurance liabilities, adjusted for net fund flows.

                                                     %   
                                    Year          Year   
                                   ended         ended   
                             31 December   31 December   
Long-term investment rates          2013          2012   
Emerging Markets                     8.0           9.0   
Old Mutual Wealth                    1.0     1.5 - 2.0   
Property & Casualty                  7.4           8.6   

Analysis of short-term fluctuations in investment return

                                                                                             GBPm   
                                               Emerging   Old Mutual   Property &                   
Year ended 31 December 2013                     Markets      Wealth¹     Casualty   Other   Total   
Actual shareholder investment return                135           22           25      34     216   
Less: Long-term investment return                   106           30           31      43     210   
Short-term fluctuations in investment return         29          (8)          (6)     (9)       6 
  
                                                                                             GBPm   
                                               Emerging   Old Mutual   Property &                   
Year ended 31 December 2012                     Markets      Wealth¹     Casualty   Other   Total   
Actual shareholder investment return                 81           65           34      34     214   
Less: Long-term investment return                   124           67           47      54     292   
Short-term fluctuations in investment return       (43)          (2)         (13)    (20)    (78)   

(1) Old Mutual Wealth long-term investment return includes GBP25 million (2012: GBP59 million) transitional adjustments to restate the effects of policyholder tax in
    arriving at AOP.

(e) Investment return adjustment for Group equity and debt instruments held in policyholder funds
AOP includes investment returns on policyholder investments in Group equity and debt instruments held by the Group's life funds. These include
investments in the Company's ordinary shares and the subordinated liabilities and ordinary shares issued by Nedbank. These investment returns
are eliminated within the consolidated income statement in arriving at profit before tax in the IFRS income statement, but are included in adjusted
operating profit. During the year ended 31 December 2013, the investment return adjustment increased AOP by GBP100 million (2012: increase of
GBP113 million).

(f) Dividends declared to holders of perpetual preferred callable securities
Dividends declared to the holders of the Group's perpetual preferred callable securities on an adjusted operating profit basis were GBP42 million for
the year ended 31 December 2013 (2012: GBP42 million). These are recognised in finance costs on an accruals basis for the purpose of
determining adjusted operating profit. In accordance with IFRS the total cash distribution of GBP47 million (2012: GBP42 million) is recognised
directly in equity. This distribution included GBP5 million accrued interest paid in respect of securities accepted for repurchase.

(g) US Asset Management equity plans
US Asset Management has a number of long-term incentive arrangements with senior employees in its asset management affiliates.

The Group has issued put options in equities in the affiliates to senior employees as part of its US affiliate incentive schemes. The impact of
revaluing these instruments is recognised in accordance with IFRS, but excluded from AOP. At 31 December 2013, these instruments were revalued, the
impact of which was a loss of GBP38 million (2012: loss of GBP13 million).

(h) Credit-related fair value gains and losses on Group debt instruments
The widening of credit spread is related to the Group's debt instruments causes the market value of these instruments to decrease, resulting in
gains being recognised in the consolidated income statement. Conversely, if the credit spread narrows and the market value of debt instruments
rises then losses are recognised in the consolidated income statement. In the directors' view, such movements are not reflective of the underlying
performance of the Group and will reverse over time and they have therefore been excluded from AOP. For the year ended 31 December 2013 a
net loss of GBP31 million was recognised (2012: loss of GBP55 million).

On 1 August 2012, the Group redeemed GBP388 million of the GBP500 million senior bond due in 2016 at a cash consideration of GBP459 million.
The GBP71 million excess over the nominal value reflected the market value of the instrument prior to redemption.

(i) Old Mutual Wealth restructuring expenditure
The Old Mutual Wealth business embarked on a significant change project to fundamentally restructure the way in which its UK platform business
operates. Over the next two to three years, it will migrate certain elements of service provision to International Financial Data Services (IFDS).
Costs related to decommissioning of existing technology and service provision and the migration of service to IFDS will be excluded from AOP.

These costs will comprise payments to IFDS and directly attributable internal project costs and totalled GBP20 million in 2013.

C2: Earnings and earnings per share

The Group calculates earnings per share (EPS) on several different bases. IFRS requires the calculation of basic and diluted EPS. Adjusted
operating EPS reflects earnings per share consistent with the Group's alternative profit measure. JSE Limited (JSE) Listing Requirements also
require the Group to calculate headline EPS. The Group's EPS on these different bases are summarised below:

                                                                                                               Pence   
                                                                                                          Year ended   
                                                                                            Year ended   31 December   
                                                                                           31 December          2012   
                                                        Source of guidance         Notes          2013      Restated   
Basic earnings per share(1)                             IFRS                       C2(a)          15.0          24.9   
Diluted basic earnings per share(1)                     IFRS                       C2(b)          13.9          23.1   
Adjusted operating earnings per share                   Group policy               C2(c)          18.4          17.5   
Headline earnings per share (Gross of tax)(2)           JSE Listing Requirements   C2(d)          15.6          13.5   
Headline earnings per share (Net of tax)(2)             JSE Listing Requirements   C2(d)          15.2          13.8   
Diluted headline earnings per share (Gross of tax)(2)   JSE Listing Requirements   C2(d)          14.6          12.7   
Diluted headline earnings per share (Net of tax)(2)     JSE Listing Requirements   C2(d)          14.3          12.9   

(1) Restatement for the impact of changes in policies did not result in changes to basic, diluted basic and adjusted operating earnings per share for the year ended 31
    December 2012.
(2) The prior year has been restated for the impact of changes in accounting policies. Refer to note I1 for further details.

(a) Basic earnings per share
Basic earnings per share is calculated by dividing the profit for the financial year attributable to ordinary equity shareholders by the weighted
average number of ordinary shares in issue during the year excluding own shares held in policyholder funds, ESOP trusts, Black Economic Empowerment
trusts and other related undertakings.

The table below reconciles the profit attributable to equity holders of the parent to profit attributable to ordinary equity holders:

                                                                                                                               GBPm   
                                                                                                                         Year ended   
                                                                                                           Year ended   31 December   
                                                                                                          31 December          2012   
                                                                                                                 2013     Restated¹   
Profit for the financial year attributable to equity holders of the parent from continuing operations             702           608   
Profit for the financial year attributable to equity holders of the parent from discontinued operations             3           564   
Profit for the financial year attributable to equity holders of the parent                                        705         1,172   
Dividends paid to holders of perpetual preferred callable securities, net of tax credits                         (37)          (32)   
Profit attributable to ordinary equity holders                                                                    668         1,140   

(1) The prior year has been restated for the impact of changes in accounting policies. Refer to note I1 for further details.

Total dividends paid to holders of perpetual preferred callable securities of GBP37 million for the year ended 31 December 2013 (year ended 31
December 2012: GBP32 million) are stated net of tax credits of GBP10 million (year ended 31 December 2012: GBP10 million).

The table below summarises the calculation of the weighted average number of ordinary shares for the purposes of calculating basic earnings per
share:
                                                                                                         Millions   
                                                                                         Year ended    Year ended   
                                                                                        31 December   31 December   
                                                                                               2013          2012   
Weighted average number of ordinary shares in issue                                           4,897         5,096   
Shares held in charitable foundations                                                           (6)           (6)   
Shares held in ESOP trusts                                                                     (55)          (61)   
Adjusted weighted average number of ordinary shares                                           4,836         5,029   
Shares held in life funds                                                                     (155)         (181)   
Shares held in Black Economic Empowerment trusts                                              (239)         (261)   
Weighted average number of ordinary shares used to calculate basic earnings per share         4,442         4,587   
Basic earnings per ordinary share (pence)¹                                                     15.0          24.9   

(1) Restatement for the impact of changes in policies did not result in changes to basic earnings per share for the year ended 31 December 2012.

(b) Diluted basic earnings per share
Diluted basic EPS recognises the dilutive impact of share options held in ESOP trusts and Black Economic Empowerment trusts, to the extent they
have value, in the calculation of the weighted average number of shares, as if the relevant shares were in issue for the full period.

The tables below reconcile the profit attributable to ordinary equity holders to diluted profit attributable to ordinary equity holders and summarises
the calculation of weighted average number of shares for the purpose of calculating diluted basic earnings per share:

                                                                                                           Year ended   
                                                                                             Year ended   31 December   
                                                                                            31 December          2012   
                                                                                    Notes          2013     Restated¹   
Profit attributable to ordinary equity holders (GBPm)                                               668         1,140   
Dilution effect on profit relating to share options issued by subsidiaries (GBPm)                  (10)          (10)   
Diluted profit attributable to ordinary equity holders (GBPm)                                       658         1,130   
Weighted average number of ordinary shares (millions)                               C2(a)         4,442         4,587   
Adjustments for share options held by ESOP trusts (millions)                                         45            53   
Adjustments for shares held in Black Economic Empowerment trusts (millions)                         239           261   
Weighted average number of ordinary shares used to calculate diluted basic                                              
earnings per share (millions)                                                                     4,726         4,901   
Diluted basic earnings per ordinary share (pence)(2)                                               13.9          23.1   

(1) The prior year has been restated for the impact of changes in accounting policies. Refer to note I1 for further details.
(2) Restatement for the impact of changes in policies did not result in changes to diluted basic earnings per share for the year ended 31 December 2012.

(c) Adjusted operating earnings per share
The following table presents a reconciliation of profit for the financial year to adjusted operating profit after tax attributable to ordinary equity holders
and summarises the calculation of adjusted operating earnings per share:
                                                                                                            Year ended   
                                                                                              Year ended   31 December   
                                                                                             31 December          2012   
                                                                                     Notes          2013   Restated(1)   
Profit for the financial year attributable to equity holders of the parent (GBPm)                    705         1,172   
Adjusting items (GBPm)                                                                               286           467   
Tax on adjusting items (GBPm)                                                                       (46)          (44)   
Non-core operations (GBPm)                                                                          (32)         (165)   
Profit from discontinued operations (GBPm)                                                           (3)         (564)   
Non-controlling interest on adjusting items (GBPm)                                                  (20)          (25)   
Adjusted operating profit after tax attributable to ordinary equity holders (GBPm)                   890           841   
Adjusted weighted average number of ordinary shares used to calculate adjusted                                           
operating earnings per share (millions)(2)                                           C2(a)         4,836         4,818   
Adjusted operating earnings per share (pence)                                                       18.4          17.5   

(1) The prior year has been restated for the impact of changes in accounting policies. Refer to note I1 for further details.
(2) For the year ended 31 December 2012, the weighted average number of shares used in the calculation of basic and diluted basic EPS was adjusted for the seven-for-
    eight share consolidation that was affected on 23 April 2012. For adjusted operating EPS, the adjustment of the weighted average number of shares has been made
    effective from 1 January 2012. This adjustment had the effect of presenting adjusted EPS on a more consistent basis, but resulted in a difference between the
    adjusted weighted average number of shares for IFRS and AOP.

(d) Headline earnings per share
The Group is required to calculate headline earnings per share (HEPS) in accordance with the JSE Limited (JSE) Listing Requirements, determined
by reference to the South African Institute of Chartered Accountants' circular 02/2013 (Revised) 'Headline Earnings'. The table below sets out a
reconciliation of basic EPS and HEPS in accordance with that circular. Disclosure of HEPS is not a requirement of IFRS, but it is a commonly used
measure of earnings in South Africa.

The table below reconciles the profit for the financial year attributable to equity holders of the parent to headline earnings and summarises
the calculation of basic and diluted HEPS:
                                                                                                                    GBPm
                                                                                                              Year ended
                                                                                           Year ended   31 December 2012
                                                                                     31 December 2013        Restated(1)
                                                                             Notes  Gross        Net    Gross        Net
Profit for the financial year attributable to equity holders of the parent            705        705    1,172      1,172
Dividends paid to holders of perpetual preferred callable securities                 (37)       (37)     (32)       (32)
Profit attributable to ordinary equity holders                                        668        668    1,140      1,140
Adjustments:
Impairments of goodwill and intangible assets                                          28         28       35         35
Loss/(profit) on disposal of subsidiaries, associated undertakings
  and strategic investments                                                             4       (12)    (183)      (173)
Realised gains (net of impairments) on available-for-sale financial assets            (8)        (8)     (21)       (21)
Exchange differences realised on disposal                                               -          -    (350)      (350)
Headline earnings                                                                     692        676      621        631

Weighted average number of ordinary shares                                   C2(a)  4,442      4,442    4,587      4,587

Diluted weighted average number of ordinary shares                           C2(b)  4,726      4,726    4,901      4,901

Headline earnings per share (pence)                                                  15.6       15.2     13.5       13.8

Diluted headline earnings per share (pence)                                          14.6       14.3     12.7       12.9

(1) The prior year has been restated for the impact of changes in accounting policies. Refer to note I1 for further details. Impairment of intangible assets is now excluded
    from the determination of HEPS.

C3: Dividends                                                                                      
                                                                                            GBPm   
                                                                                            Year   
                                                                        Year ended         ended   
                                                                       31 December   31 December   
                                                                              2013          2012   
2011 Final dividend paid - 3.5p per 10p share                                    -           178   
Special dividend - 18.0p per 10p share                                           -           915   
2012 Interim dividend paid – 1.75p per 11 3/7p share                             -            79   
2012 Final dividend paid – 5.25p per 11 3/7p share                             238             -   
2013 Interim dividend paid – 2.10p per 11 3/7p share                            98             -   
Dividends to ordinary equity holders                                           336         1,172   
Dividends paid to holders of perpetual preferred callable securities            47            42   
Dividend payments for the period                                               383         1,214   

Final and interim dividends paid to ordinary equity holders are calculated using the number of shares in issue at the record date less own shares
held in ESOP trusts, life funds of Group entities, Black Economic Empowerment trusts and related undertakings.

As a consequence of the exchange control arrangements in place in certain African territories, dividends to ordinary equity holders on the branch
registers of those countries (or, in the case of Namibia, the Namibian section of the principal register) are settled through Dividend Access Trusts
established for that purpose.

A final dividend of 6.0 pence (or its equivalent in other applicable currencies) per ordinary share in the Company has been recommended by the
directors. The final dividend will be paid on 30 May 2014 to shareholders on the register at the close of business on 14 April 2014 for the Malawi
register, 16 April 2014 for the South African, Zimbabwe and Namibian registers and 22 April 2014 for the UK register. The dividend will absorb an
estimated GBP275 million of shareholders' funds. The Company is not planning to offer a scrip dividend alternative.

In March and November 2013, GBP22 million and GBP25 million respectively, were declared and paid to holders of perpetual preferred callable
securities (March 2012: GBP22 million, November 2012: GBP20 million).

D: Other income statement notes
D1: Income tax expense
(a) Analysis of total income tax expense
                                                                             GBPm   
                                                                       Year ended   
                                                         Year ended   31 December   
                                                        31 December          2012   
                                                               2013   Restated(1)   
Current tax                                                                         
United Kingdom                                                  (3)            18   
Overseas tax                                                                        
- Africa                                                        407           501   
- Europe                                                         19            30   
- Rest of the world                                               7            16   
Withholding taxes (STC)                                          16            23   
Adjustment to current tax in respect of prior years            (25)             5   
Total current tax                                               421           593   
Deferred tax                                                                        
Origination and reversal of temporary differences               142         (122)   
Effect on deferred tax of changes in tax rates                 (15)             2   
Recognition of deferred tax assets                                1           (2)   
Adjustments to deferred tax in respect of prior years             3             -   
Total deferred tax                                              131         (122)   
Total income tax expense                                        552           471   

(1) The prior year has been restated for the impact of changes in accounting policies. Refer to note I1 for further details.

(b) Reconciliation of total income tax expense                                   
                                                                          GBPm   
                                                                    Year ended   
                                                      Year ended   31 December   
                                                     31 December          2012   
                                                            2013   Restated(1)   
Profit before tax                                          1,532         1,385   
Tax at UK standard rate of 23.25% (2012: 24.5%)              356           339   
Different tax rate or basis on overseas operations            57            19   
Untaxed and low taxed income                                (76)          (83)   
Disallowable expenses                                         35            48   
Net movement on deferred tax assets not recognised            31            48   
Effect on deferred tax of changes in tax rates              (15)             2   
Withholding taxes (STC)                                       10            20   
Income tax attributable to policyholder returns              133            59   
Tax on Group equity held in life funds                        21            26   
Other                                                          -           (7)   
Total income tax expense                                     552           471   

(1) The prior year has been restated for the impact of changes in accounting policies. Refer to note I1 for further details.

(c) Income tax relating to components of other comprehensive income                                            
                                                                                                        GBPm   
                                                                                                  Year ended   
                                                                                    Year ended   31 December   
                                                                                   31 December          2012   
                                                                                          2013   Restated(1)   
Preferred perpetual callable securities                                                   (10)          (10)   
Measurement gains on defined benefit plans                                                  22             4   
Income tax on items that will not be reclassified subsequently to profit or loss            12           (6)   
Income tax on items that may be reclassified subsequently to profit or loss                (2)             5   
Income tax expense/(credit) – continuing operations                                         10           (1)   
Income tax expense on fair value movements – discontinued operations                         -             1   
Income tax expense relating to components of other comprehensive income                     10             -   

(1) The prior year has been restated for the impact of changes in accounting policies. Refer to note I1 for further details.

(d) Reconciliation of income tax expense in the IFRS income statement to income tax on adjusted operating profit
                                                                                                                      Year ended   
                                                                                                        Year ended   31 December   
                                                                                                       31 December          2012   
                                                                                                              2013   Restated(1)   
Income tax expense                                                                                             552           471   
Tax on adjusting items                                                                                                             
Goodwill impairment and impact of acquisition accounting                                                        26            51   
Profit/(loss) on disposal of subsidiaries, associates and strategic investments                                 16          (10)   
Short-term fluctuations in investment return                                                                   (2)             7   
Tax on dividends declared to holders of perpetual preferred callable securities recognised in equity          (10)          (10)   
US Asset Management equity plans                                                                                11             6   
Restructuring costs                                                                                              5             -   
Total tax on adjusting items                                                                                    46            44   
Income tax attributable to policyholders returns                                                             (174)          (75)   
Income tax on adjusted operating profit                                                                        424           440   

(1) The prior year has been restated for the impact of changes in accounting policies. Refer to note I1 for further details.

E: Financial assets and liabilities
E1: Borrowed funds
                                                                                                                 GBPm   
                                                                               At                                  At   
                                                    Group             31 December       Group             31 December   
                                                excluding                    2013   excluding                    2012   
                                        Notes     Nedbank   Nedbank         Group     Nedbank   Nedbank         Group   
Senior debt securities and term loans                 113     1,151         1,264         122     1,363         1,485   
Floating rate notes                     E1(a)           -       673           673           -       849           849   
Fixed rate notes                        E1(b)         113       478           591         122       514           636   
Mortgage-backed securities              E1(d)           -        65            65           -       131           131   
Subordinated debt securities (net of                                                                                    
Group holdings)                         E1(e)         703       597         1,300         765       669         1,434   
Borrowed funds                                        816     1,813         2,629         887     2,163         3,050   
Other instruments treated as equity                                                                                     
for accounting purposes                                                                                                 
EUR374 million perpetual preferred(1)                                                                                      
callable securities                                   253                                 334                           
GBP273 million perpetual preferred(2)                                                                                    
callable securities                                   273                                 348                           
Total: Book value                                   1,342                               1,569                           
Nominal value of the above                          1,370                               1,590                           

(1) The EUR374 million perpetual callable security was previously EUR495 million with EUR121 million being acquired via a Modified Dutch Auction tender on 19 November 2013.
(2) The GBP273 million perpetual callable security was previously GBP348 million with GBP75 million being acquired via a Modified Dutch Auction tender on 19
    November 2013.

The table below is a maturity analysis of the liability cash flows based on contractual maturity dates for borrowed funds. Maturity analysis is
undiscounted and based on year-end exchange rates.
                                                                                                             GBPm   
                                                                           At                                  At   
                                                Group             31 December       Group             31 December   
                                            excluding                    2013   excluding                    2012   
                                              Nedbank   Nedbank         Group     Nedbank   Nedbank         Group   
Less than 1 year                                   98       385           483         110       522           632   
Greater than 1 year and less than 5 years         751     1,727         2,478         907     1,820         2,727   
Greater than 5 years                            1,099       236         1,335       1,311       314         1,625   
Total                                           1,948     2,348         4,296       2,328     2,656         4,984   

Contractual maturity tables include all the data available for both years as at 31 December 2013.

Senior debt securities and term loans                                                                
(a) Floating rate notes                                                                              
                                                                                              GBPm   
                                                                                  At            At   
                                                                         31 December   31 December   
                                                         Maturity date          2013          2012   
Nedbank - Floating rate unsecured senior debt                                                        
R98 million at inflation linked (3.80% real yield)              Repaid             -             8   
R1,750 million at inflation linked (3.90% real yield)           Repaid             -           151   
R1,552 million at JIBAR + 1.48%                                 Repaid             -           114   
R988 million at JIBAR + 1.05%                               March 2014            50            71   
R500 million at JIBAR + 1.00%                               April 2014            26            33   
R1,075 million at JIBAR + 0.94%                           October 2014            62            79   
R1,297 million at JIBAR + 1.00%                          February 2015            75            95   
R1,027 million at JIBAR + 1.75%                             April 2015            60            76   
R250 million at JIBAR + 1.00%                              August 2015            14            18   
R1,044 million at JIBAR + 2.20%                         September 2015            61            76   
R677 million at JIBAR + 1.25%                               March 2016            39            49   
R3,056 million at JIBAR + 0.8%                               July 2016           176             -   
R694 million at JIBAR + 0.75%                            November 2016            40             -   
R405 million at JIBAR + 1.30%                            February 2017            23            30   
R786 million at JIBAR + 1.30%                              August 2017            42            43   
R80 million at JIBAR + 2.15%                                April 2020             5             6   
Total floating rate notes                                                        673           849   

All floating rate notes are non-qualifying for the purposes of regulatory tiers of capital.

(b) Fixed rate notes                                                                                              
                                                                                                           GBPm   
                                                                                               At            At   
                                                                                      31 December   31 December   
                                                                      Maturity date          2013          2012   
Nedbank - Fixed rate unsecured senior debt (net of Group holdings)                                                
R450 million at 8.39%                                                    March 2014            26            33   
R478 million at 9.68%                                                    April 2015            28            35   
R3,244 million at 10.55%                                             September 2015           192           242   
R1,137 million at 9.36%                                                  March 2016            67            85   
R151 million at 6.91%                                                     July 2016             9             -   
R1,273 million at 11.39%                                             September 2019            80           102   
R1,888 million at 8.92%                                               November 2020           109             -   
R660 million at zero coupon                                            October 2024            14            17   
                                                                                              525           514   
Less: fixed rate notes held by other Group companies                                         (47)             -   
Banking fixed rate unsecured senior debt (net of Group holdings)                              478           514   
Group excluding Nedbank                                                                                           
US$2 million secured senior debt at 5.23%(1)                            August 2014             1            10   
GBP112 million eurobond at 7.125%                                      October 2016           112           112   
                                                                                              113           122   
Total fixed rate notes                                                                        591           636   

All fixed rate notes are non-qualifying for the purpose of regulatory tiers of capital.
(1) $14 million of the $16 million senior bond was repaid, with repayment of $12 million on 1 November 2013 and $2 million on 15 December 2013.

(c) Revolving credit facilities and irrevocable letters of credit
Following an internal review of Group funding requirements, the Group reduced its revolving credit facility by GBP400 million in August 2013. The
Group now has access to a GBP800 million (2012: GBP1,200 million) five-year multi-currency revolving credit facility which matures in April 2016.
At 31 December 2013 and 31 December 2012, none of this facility was drawn down and there were no irrevocable letters of credit in issue against
this facility.

(d) Mortgage-backed securities (net of Group holdings)                                                                
                                                                                                               GBPm   
                                                                                                   At            At   
                                                                                          31 December   31 December   
                                                                 Tier   Maturity date            2013          2012   
Nedbank                                                                                                               
R480 million (class A1) at JIBAR + 1.10%                         Tier 2 25 October 2039            13            32   
R336 million (class A2) at JIBAR + 1.25%                         Tier 2 25 October 2039            20            25   
R900 million (class A3) at JIBAR + 1.54%                         Tier 2 25 October 2039            52            66   
R110 million (class B) at JIBAR + 1.90%                          Tier 2 25 October 2039             6             8   
                                                                                                   91           131   
Less: Mortgage backed securities held by other Group companies                                   (26)             -   
Total mortgage-backed securities                                                                   65           131   

(e) Subordinated debt securities (net of Group holdings)

                                                                                                                     GBPm   
                                                                                                          At           At   
                                                                    First call         Maturity   31December   31December   
                                                         Tier             date             date         2013         2012   
Nedbank                                                                                                                     
R300 million at JIBAR + 2.50%                          Tier 2           Repaid           Repaid            -           11   
R1,800 million at 9.84%                                Tier 2           Repaid           Repaid            -          137   
R1,265 million at JIBAR + 4.75%               Non-core Tier 1    November 2018    November 2018           74           93   
R487 million at 15.05%                        Non-core Tier 1    November 2018    November 2018           32           43   
R1,700 million at 8.90%                                Tier 2    February 2014    February 2019          101          132   
R1,000 million at 10.54%                               Tier 2   September 2015   September 2020           62           81   
US$100 million at 3 month USD LIBOR          Tier 2 Secondary       March 2017       March 2022           60           62   
R2,000 million at JIBAR + 0.47%                        Tier 2        July 2017        July 2022          116          146   
R1,800 million at JIBAR + 2.75%                        Tier 2        July 2018        July 2023          105            -   
R1,200 million at JIBAR + 2.55%                        Tier 2    November 2018    November 2023           69            -   
                                                                                                         619          705   
Less: Banking subordinated debt securities                                                                                  
held by other Group companies                                                                           (22)         (36)   
Banking subordinated securities                                                                                             
(net of Group holdings)                                                                                  597          669   
Group excluding Nedbank                                                                                                     
R3,000 million at 8.92% until October 2015                                                                                  
and 3 month JIBAR + 1.59% thereafter             Lower Tier 2     October 2015     October 2020          172          218   
GBP500 million at 8.00%1                         Lower Tier 2                -        June 2021          531          547   
                                                                                                         703          765   
Total subordinated debt securities                                                                     1,300        1,434   

(1) The principal and coupon on the bond were initially swapped into floating rate Swedish kronor, at 3 month STIBOR plus 5.46%. Following the Nordic sale, GBP375
    million of the coupon is now swapped into floating rate sterling at 6 month GBP LIBOR plus 4.15% and GBP125 million of principal and coupon is swapped into US
    dollars at 6 month USD LIBOR plus 5.49%.

F: Other statement of financial position notes
F1: Non-controlling interests

(a) Profit or loss
(i) Ordinary shares
The non-controlling interests share of profit for the financial year has been calculated on the basis of the Group's effective ownership of the
subsidiaries in which it does not own 100% of the ordinary equity. The principal subsidiaries where a non-controlling interest exists is the Group's
banking business in South Africa, Nedbank. For the year ended 31 December 2013 the non-controlling interests attributable to ordinary shares was
GBP259 million (2012: GBP256 million).

(ii) Preferred securities                                                      
                                                                        GBPm   
                                                            At            At   
                                                   31 December   31 December   
                                                          2013          2012   
Nedbank                                                                        
R3,583 million non-cumulative preference shares             19            23   
Group excluding Nedbank                                                        
US$750 million cumulative preferred securities(1)            -            27   
Non-controlling interests – preferred securities            19            50   

(1) On 24 September 2012, the Group repaid the US$750 million cumulative preference securities at their nominal value.

(iii) Non-controlling interests - adjusted operating profit
The following table reconciles non-controlling interests' share of profit for the financial year to non-controlling interests' share of adjusted
operating profit:
                                                                                                           GBPm   
                                                                                                     Year ended   
                                                                                       Year ended   31 December   
                                                                                      31 December          2012   
Reconciliation of non-controlling interests' share of profit for the financial year          2013   Restated(1)   
The non-controlling interests share is analysed as follows:                                                       
Non-controlling interests – ordinary shares                                                   259           256   
Income attributable to Black Economic Empowerment trusts                                       20            25   
Non-controlling interests share of adjusted operating profit                                  279           281   

(1) The prior year has been restated for the impact of changes in accounting policies. Refer to note I1 for further details.

The Group uses revised weighted average effective ownership interests when calculating the non-controllable interest applicable to the adjusted
operating profit of its Southern African businesses. This reflects the legal ownership of these businesses following the implementation for Black Economic
Empowerment (BEE) schemes in 2005. In accordance with IFRS accounting rules the shares issued for BEE purposes are deemed to be, in substance, options. 
Therefore the effective ownership interest of the minorities reflected in arriving at profit after tax in the consolidated income statement is lower than 
that applied in arriving at adjusted operating profit after tax. In 2013 the increase in adjusted operating profit attributable to non-controlling interests 
as a result of this was GBP20 million (2012: GBP25 million).

(b) Statement of financial position

(i) Ordinary shares                                                                    
                                                                                GBPm   
                                                                                  At   
                                                                    At   31 December   
                                                           31 December          2012   
Reconciliation of movements in non-controlling interests          2013   Restated(1)  
Balance at beginning of the year                                 1,684         1,652   
Non-controlling interests' share of profit                         259           256   
Non-controlling interests' share of dividends paid               (117)         (119)   
Net disposal of interests                                           20            20   
Foreign exchange and other movements                             (344)         (125)   
Balance at end of the year                                       1,502         1,684   

(1) The prior year has been restated for the impact of changes in accounting policies. Refer to note I1 for further details.

(ii) Preferred securities                                                       
                                                                         GBPm   
                                                             At            At   
                                                    31 December   31 December   
                                                           2013          2012   
Nedbank                                                                         

R3,583 million non-cumulative preference shares(1)          265           273   
Total in issue at 31 December                               265           273   

Preferred securities at 31 December 2013 are held at historic value of consideration received less unamortised issue costs and are stated net of
securities held by Group companies

(1) 3,583 million R10 preference shares issued by Nedbank Limited (Nedbank), the Group's banking subsidiary. These shares are non-redeemable and non-cumulative
    and pay a cash dividend equivalent to 75% of the prime overdraft interest rate of Nedbank. Preference shareholders are only entitled to vote during periods when a
    dividend or any part of it remains unpaid after the due date for payment or when resolutions are proposed that directly affect any rights attaching to the shares or the
    rights of the holders. Preference shareholders will be entitled to receive their dividends in priority to any payment of dividends made in respect of any other class of
    Nedbank's shares.

G: Other notes                                                                     
G1: Contingent liabilities                                                         
                                                                            GBPm   
                                                                At            At   
                                                       31 December   31 December   
                                                              2013          2012   
Guarantees and assets pledged as collateral security         2,052         2,521   
Irrevocable letters of credit                                  184           177   
Secured lending                                                304           492   
Other contingent liabilities                                    30            57   

The Group, through its South African banking business, has pledged debt securities amounting to GBP703 million (2012: GBP1,203 million) as
collateral for deposits received under re-purchase agreements. These amounts represent assets that have been transferred but do not qualify for
derecognition under IAS 39. These transactions are entered into under terms and conditions that are standard industry practice to securities
borrowing and lending activities.

Contingent liabilities – tax
The Revenue authorities in the principal jurisdictions in which the Group operates (South Africa and the United Kingdom) routinely review historic
transactions undertaken and tax law interpretations made by the Group. The financial statements accordingly include provisions that reflect the
Group's assessment of liabilities which might reasonably be expected to materialise.

Nedbank litigation
There are a number of legal or potential claims against Nedbank and its subsidiary companies, the outcome of which cannot at present be
foreseen. As previously disclosed, the largest of these potential actions are claims in the High Court against Nedbank by certain shareholders in
Pinnacle Point Group Ltd, alleging that Nedbank had a legal duty of care to them arising from a share swap transaction. In 2013 two of these
claims of R147 million and of R802 million were dismissed by the North Gauteng High Court. The only claim remaining is for R355 million.

Originally these shareholders and others lodged proceedings with the Securities Regulation Panel (SRP) for an order declaring that an affected
transaction took place. The SRP ruled that no affected transaction took place. The last remaining claimant brought an application to the South
Gauteng High Court for the review of the SRP ruling. This application was dismissed with costs on 15 November 2013. The applicant filed a notice
to apply for leave to appeal this judgment, which Nedbank will oppose.

During 2011 further actions were instituted against Nedbank Ltd by other stakeholders for R210 million, and by Absa Bank Limited for R773 million.
In both these actions Nedbank have filed exceptions against the claims.

Nedbank Ltd and its legal advisers remain of the opinion that the remaining claims are ambitious, and that the remaining claimants will have great
difficulty succeeding.

Consumer protection
Old Mutual is committed to supporting its customers in meeting their lifetime goals and treating customers fairly is central to how our businesses
operate. We routinely engage with customers and regulators to ensure that we meet this commitment, but there is the risk of regulatory intervention
across various jurisdictions, giving rise to the potential for customer redress which can result in retrospective changes to policyholder benefits,
penalties or fines. Where this occurs, the Group makes financial provision for the related costs.

G2: Businesses acquired during the year

The Group continued to expand operations in Africa and Latin America through the following completed acquisitions:

                                                                                  Consideration     Shares                       
Acquiree                           Country   Nature of business                     paid (GBPm)   acquired      Effective date   
Oceanic Life                       Nigeria   Life insurance                                   9        70%    20 December 2012   
                                             Business platform and distribution                                                  
Aiva Holdings Group S.A            Uruguay   business                                        22        86%      2 January 2013   
Provident Life Assurance Company                                                                                                 
Limited                            Ghana     Life insurance                                   7        90%   12 September 2013   
Oceanic General                    Nigeria   General insurance                               12        70%    26 November 2013   

Goodwill of GBP30 million has been recognised on these acquisitions. Refer to note F1 in the Annual Report and Accounts for further analysis of
the goodwill recognised. Acquisition costs of GBP2 million are included in operating expenses and have been excluded from the Group's adjusted
operating profit. The net profit received from the above acquisitions has been consolidated for the 31 December 2013 financial year.

The table below sets out the consolidated assets and liabilities acquired as a result of these acquisitions:

                                                    GBPm   
                                              Acquirees'   
                                                carrying   
                                                  amount   
Assets                                                     
Investment property                                   13   
Investments and securities                            20   
Cash and cash equivalents                             17   
Trade, other receivables and other assets              5   
Total assets                                          55   
Liabilities                                                
Long-term business policyholder liabilities           18   
Current tax payable                                    1   
Trade, other payables and other liabilities           10   
Total liabilities                                     29   
Net assets acquired                                   26   
Group's portion of net assets acquired                20   
Consideration paid                                    50   
Goodwill recognised                                   30   

The carrying value of assets and liabilities in the entities statement of financial position on acquisition date approximates the fair value of these
items determined by the Group. The receivables recognised by the Group are included in other assets and represent their fair value due to their
short-term nature. No indemnification assets or contingent liabilities were recognised on acquisition of the above business. Contingent
consideration of GBP11 million is payable to the sellers of Aiva Holdings Group SA in 2016 and 2018 dependent on the achievement of pre-
determined performance indicators, an estimate which has been included in the purchase consideration.

G3: Events after the reporting date

On 28 February 2014, the Group announced the acquisition of Intrinsic Financial Services Limited, the third largest adviser network in the UK with
more than 3,000 advisers, both restricted and independent. This will enable the Old Mutual Wealth business to provide advice to UK retail
customers. The purchase of Intrinsic Financial Services Limited is a critical part of the Old Mutual Wealth strategy to create a leading wealth
management business that combines financial advice, investment solutions and high quality asset management to deliver first class outcomes for
our customers.

On 28 February 2014, the Group announced that during 2014 it intends to proceed with an Initial Public Offering of a minority stake in its US Asset
Management Business (USAM), subject to market conditions. The offering will enhance USAM's financial and operating flexibility to deploy capital
to continue to grow and further develop the business. This transaction will require a registration statement to be filed with the U.S. Securities and
Exchange Commission. The registration statement will include additional information. The announcement was made pursuant to and in accordance with 
Rule 135 under the U.S. Securities Act (1933). This disclosure does not constitute an offer to sell or the solicitation of an offer to buy securities, 
and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration 
or qualification under the securities laws of that jurisdiction.

In line with Nedbank's scheduled capital plans, there was a full capital redemption of NED8, the R1.7 billion unsecured subordinated note that
qualified as Tier 2 capital under Basel II, with effect from 8 February 2014. This event is not an adjusting post balance sheet event.

H: Discontinued operations and disposal groups held for sale
H1: Discontinued operations

Discontinued operations relate to the results of the Group's Swedish, Danish and Norwegian life businesses, collectively Nordic. The disposal of
Nordic was completed on 21 March 2012 following shareholder and regulatory approval and was reported up until that date. The Group continues to
incur costs that are directly related to the sale of Nordic. These costs relate to the transition of IT and other services, previously provided by Nordic
to the wider Group, back to the Group. These costs are included in the expenses related to the discontinued operations. The profit on disposal of
discontinued operations for the year ending 31 December 2013 was recognised following the finalisation of the transfer of Old Mutual Guodian Life
Assurance Company Ltd, the Group's Chinese joint venture, from Nordic to Old Mutual Life Assurance Company (South Africa) Limited. This
transaction was included in the Nordic sale agreement and was subject to regulatory approval which was obtained in June 2013.

(a) Income statement from discontinued operations (Nordic)                                                      
                                                                                                         GBPm   
                                                                                     Year ended    Year ended   
                                                                                    31 December   31 December   
                                                                                           2013          2012   
Revenue                                                                                       -           842   
Expenses                                                                                   (26)         (866)   
Loss before tax from discontinued operations - trading activities                          (26)          (24)   
Profit on disposal                                                                           27           239   
Realised available-for-sale investment gains and exchange differences on disposal             -           350   
Profit before tax from discontinued operations                                                1           565   
Income tax credit/(charge)                                                                    2           (1)   
Profit after tax from discontinued operations                                                 3           564   

(b) Statement of comprehensive income from discontinued operations (Nordic)                                  
                                                                                                      GBPm   
                                                                                  Year ended    Year ended   
                                                                                 31 December   31 December   
                                                                                        2013          2012   
Profit from discontinued operations after tax                                              3           564   
Other comprehensive income for the financial year                                                            
Fair value gains                                                                           -             4   
Exchange differences realised on disposal                                                  -         (350)   
Currency translation differences/exchange                                                                    
differences on translating foreign operations                                              -             2   
Other movements                                                                            -           (3)   
Aggregate tax on transfers from equity                                                     -           (1)   
Total other comprehensive loss from discontinued operations                                -         (348)   
Total comprehensive income for the financial year from discontinued operations             3           216   
Attributable to                                                                                              
Equity holders of the parent                                                               3           216   

(c) Net cash flows from discontinued operations (Nordic)                               
                                                                                GBPm   
                                                            Year ended    Year ended   
                                                           31 December   31 December   
                                                                  2013          2012   
Operating activities                                                 -           (8)   
Investing activities                                                 -         (121)   
Net cash flows from discontinued operations                          -         (129)   

H2: Contingent liabilities in respect of the disposal of US Life

Following its disposal in April 2011 of US Life to the Harbinger group (Harbinger), the Group has retained certain residual commitments and
contingent liabilities relating to that business. These arise from sale warranties and indemnities that are typical in transactions of this nature,
including in respect of certain litigation (including class actions) and regulatory enforcement actions arising from events that occurred before
completion of the sale. The residual commitments are in effect for varying periods of time.

The sale agreement contemplated that Harbinger would establish certain internal reinsurance arrangements after completion, which were subject to
regulatory approval. If such regulatory approval was not forthcoming, there was potential for a reduction in the purchase price of US Life of up to a
maximum of US$50 million. In July 2012, Harbinger filed a lawsuit against the Group, claiming payment of a purchase price adjustment of US$50
million. The Group has filed its defence and is vigorously defending this claim. In view of the ongoing uncertainty and the Group's current
assessment of this claim, the Group has not raised a provision against this exposure.

I: Changes in accounting policies
I1: Accounting policies adopted for the year ended 31 December 2013

Several new accounting standards are applicable to the Group for the year ended 31 December 2013, with restatement of the comparative
information for the year ended 31 December 2012 as required and restatement of the opening statement of financial position as at 1 January 2012.

The standards that were relevant and have required restatement include IAS 1 'Presentation of Financial Statements', IAS 19 (Revised 2011)
'Employee Benefits', IFRS 10 'Consolidated Financial Statements' and IFRS 11 'Joint Arrangements'.

Three other standards and amendments have also been applied for the first time in 2013 but these are disclosure standards and have not required
a restatement of the statement of financial position. These include IFRS 7 'Financial Instruments: Disclosures (Amended 2011), IFRS 12 'Disclosure
of Interest in Other Entities' and IFRS 13 'Fair Value Measurement' and IAS 36 (Amended) 'Impairment of Assets'. Refer to note A5 in the Annual
Report and Accounts for further information.

IFRS 11 'Joint Arrangements' replaces IAS 31 'Interests in Joint Ventures' and SIC-13 'Jointly Controlled Entities' and removes the option to
account for joint arrangements using proportionate consolidation. Jointly controlled entities that meet the definition of a joint arrangement under
IFRS 11 'Joint Arrangements' must now be accounted for using the equity method. This did not have a material impact on the Group's statement of
financial position.

The following standards adopted by the Group had an impact on the financial statements:

Amendments to IAS 1 'Presentation of Items of Other Comprehensive Income'
The amendments to IAS 1 'Presentation of Items of Other Comprehensive Income' require that an entity present separately the items of other
comprehensive income (OCI) that may be reclassified to profit or loss in the future, from those that will never be reclassified to profit or loss. The
amendment affected presentation only and had no impact on the shareholders' equity or profit.
IAS 19 'Employee Benefits' (Revised 2011)
The Group has adopted IAS 19 'Employee Benefits' (Revised 2011) with a date of initial application of 1 January 2013.

The key amendments are:

    - The corridor method has been removed and all actuarial gains and losses are required to be recognised in OCI rather than in profit or loss.
      Expected returns on plan assets are no longer recognised in profit or loss. Instead, interest is recognised on the net defined benefit liability or
      asset in profit or loss, calculated using the discount rate used to measure the defined benefit obligation.
    - Past service costs arising from plan amendments or curtailment are now recognised in profit or loss at the earlier of when the amendment
      occurs or when the related restructuring or termination cost are recognised. The option to amortise such cost over future years has also been
      eliminated.
    - Administration costs, other than costs of managing plan assets, are recognised in the profit and loss when the service is provided.

The change in accounting policy has been applied retrospectively and as a result, the comparative information for the year ended 31 December
2012 has been restated accordingly.

The major impact of the adoption of the standard was an increase in operating and administrative expenses and a net increase in OCI. The overall
impact on the Group was a decrease in equity, an increase in the assets and an increase in the liabilities of the Group. The standard affects the
accounting for certain defined pension schemes in Emerging Markets, Nedbank and Old Mutual plc.

The transitional adjustment, applied to the opening statement of financial position as at 1 January 2013, had an effect of decreasing equity by
GBP17 million, increasing total assets by GBP81 million and increasing total liabilities by GBP98 million.

IFRS 10 'Consolidated Financial Statements'
The Group has early adopted IFRS 10 'Consolidated Financial Statements' with a date of initial application of 1 January 2013.

IFRS 10 'Consolidated Financial Statements' introduces a single control model that applies to all entities, including special purpose entities. IFRS
10 'Consolidated Financial Statements' replaces the parts of IAS 27 'Consolidated and Separate Financial Statements' that dealt with consolidated
financial statements and SIC-12 'Consolidation – Special Purpose Entities'. IFRS 10 'Consolidated Financial Statements' changes the definition of
control such that an investor controls an investee when it has power over the investee, when it is exposed, or has rights, to variable returns from its
involvement with the investee and when it has the ability to use its power over the investee to affect those returns. To meet the definition of control
in IFRS 10 'Consolidated Financial Statements', all three of these criteria must be met.

The implementation of this standard did not have a significant financial impact on the Group's assessment of its interests in investment funds, but it
did increase the number of investment funds consolidated. The principal effect was a gross up of the consolidated statement of financial position for
the difference between the value of the newly consolidated assets and liabilities and the carrying value of the Group's interest, and the equal and
opposite liability for the interests of external parties in these investment funds.

The transitional adjustment, applied to the opening statement of financial position as at 1 January 2013, had an effect of decreasing non-controlling
interest by GBP8 million, increasing total assets by GBP3,384 million and increasing total liabilities by GBP3,392 million.

The Group has only considered the consolidation suite of standards for interests that existed at 1 January 2013. The change in accounting policy
has been applied retrospectively and as a result, the comparative information for the year ended 31 December 2012 and the opening position at 1
January 2012 have been restated accordingly.

Effect of the adoption of IAS 19 (Revised) and IFRS 10 'Consolidated Financial Statements'
The following tables summarise the impact of the restatements in the financial statements:
                                                                                                                                 GBPm
                                                                                             Adjustments    Adjustments
                                                                           As previously    for adoption   for adoption
Year ended 31 December 2012                                                     reported       of IAS 19     of IFRS 10   As restated
Consolidated income statement
Profit after tax from continuing operations                                          923             (1)             (8)          914
Profit after tax for the financial year                                            1,487             (1)             (8)        1,478
Non-controlling interests                                                            314               -             (8)          306
Consolidated statement of comprehensive income
Total other comprehensive income for the financial year1                           (811)               4               -        (807)
Total comprehensive income for the financial year1                                   676               3             (8)          671
Reconciliation of adjusted operating profit to profit after tax
Adjusting items                                                                    (459)               -             (8)        (467)
Adjusted operating profit after tax attributable to equity holders of the 
parent                                                                               842             (1)               -          841
Consolidated statement of financial position
Total assets                                                                     143,497              81           3,384      146,962
Total liabilities                                                                133,699              98           3,392      137,189
Equity attributable to ordinary shareholders of the parent                         7,833            (17)               -        7,816
Non-controlling interests                                                          1,965               -             (8)        1,957

(1) The comparative information has been restated to reflect the fact that all movements on the share-based payment reserve are reflected directly in equity and no longer
    in other comprehensive income.
                                                                                                                  GBPm   
                                                                              Adjustments    Adjustments                 
                                                             As previously   for adoption   for adoption                 
At 1 January 2012                                                 reported      of IAS 19     of IFRS 10   As restated   
Consolidated statement of financial position                                                                             
Total assets                                                       162,385           (12)          2,798       165,171   
Total liabilities                                                  151,527              8          2,798       154,333   
Equity attributable to ordinary shareholders of the parent           8,488           (20)              -         8,468   

Sponsor
Merrill Lynch South Africa (Pty) Ltd
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